SINGAPORE: Singapore Airlines (SIA) has raised US $ 500 million (S $ 660 million) as part of its first US dollar bond issue, which the company will use to buy new aircraft as the aviation industry global gears for a rebound in post-pandemic travel.
The deal was closed early Thursday (January 14) and the price was priced at US Treasuries plus 260 basis points, according to a term sheet seen by Reuters.
The size of the five-and-a-half-year deal was finalized after bookkeepers received bids above US $ 1.5 billion, and the bond carries a 3 percent coupon rate, the report says. list of conditions.
READ: SIA Group carries largest number of passengers since COVID-19 restrictions
READ: Eligible Singapore Airlines staff to receive COVID-19 vaccine from January 13
SIA said the issue was oversubscribed with final demand of over US $ 2.85 billion, and was anchored by “high quality institutional investors.”
The proceeds will be used for aircraft purchases, related payments and other general purposes, including refinancing existing borrowings, the airline said.
“The issue further strengthens the company’s liquidity position and provides SIA with the financial flexibility necessary to capture medium to long-term growth beyond the COVID-19 pandemic,” he said.
Since the start of fiscal year 2020/2021, including Thursday’s issuance, Singapore Airlines has raised approximately $ 13.3 billion in additional cash. This includes S $ 8.8 billion from a rights issue, S $ 2 billion from guaranteed financing and S $ 850 million from a convertible bond issue.
“We thank our investors for their unwavering support for Singapore Airlines’ first US dollar bond issue. We are confident that this will further strengthen SIA’s competitive advantage in the industry and enhance our ability to emerge stronger from the challenges posed by the COVID-19 pandemic, ”said CEO Goh Choon Phong.
READ: How COVID-19 vaccines are transported to Singapore and stored here
Comment: Can Singapore be a major COVID-19 vaccine transshipment hub and save its aviation industry?
Airlines are increasingly optimistic that travel will resume later this year as a number of countries launch vaccination campaigns to fight COVID-19.
Singapore Airlines is the first major airline in Asia to tap global debt markets in 2021, following a wave of transactions in the second half of 2020.
According to Refinitiv data, 19 deals worth US $ 17.62 billion were completed during this period, the largest of which was a US $ 6 billion issue from Delta Air Lines.
Global airlines are expected to refinance at least $ 14.9 billion in bonds that will mature in 2021, according to Dealogic data, while $ 23.1 billion in syndicated loans will mature this year.
REPORT THIS: Our comprehensive coverage of the coronavirus outbreak and its developments
Download our app or subscribe to our Telegram channel for the latest updates on the coronavirus outbreak: https://TBEN.asia/telegram