The transaction was finalised early on Thursday (Jan 14) and the price was set at US treasuries plus 260 basis points, according to a term sheet seen by Reuters.
A Singapore Airlines Airbus A380 plane is seen parked on the tarmac at Changi International Airport in Singapore on Oct 24, 2020. (Photo: AFP/ROSLAN RAHMAN)
The size of the five-and-a-half-year deal was finalised after bookrunners received bids above US$1.5 billion, and the bond carries a 3 per cent coupon rate, the term sheet shows.
SIA said the issuance was oversubscribed with the final demand at more than US$2.85 billion, and it was anchored by “high-quality institutional investors”.
The proceeds will be used for aircraft purchases, related payments and other general purposes including refinancing of existing borrowings, the airline said.
“The issuance further strengthens the company’s liquidity position, and provides SIA with the financial flexibility to capture medium-to-long-term growth beyond the COVID-19 pandemic,” it said.
Since the start of the 2020/2021 financial year, including Thursday’s issuance, Singapore Airlines has raised about S$13.3 billion in additional liquidity. This includes S$8.8 billion from a rights issue, S$2 billion from secured financing and S$850 million from a convertible bond issue.
“We thank our investors for their strong support of Singapore Airlines’ debut issuance of US-dollar bonds. We are confident that this will further strengthen SIA’s competitive advantage in the industry, and bolster our ability to emerge stronger from the challenges posed by the COVID-19 pandemic,” said CEO Goh Choon Phong.
Airlines are growing increasingly optimistic travel will resume later this year as a number of countries roll out vaccination campaigns to combat COVID-19.
Singapore Airlines is the first major airline in Asia to tap the global debt markets in 2021, following a rush of deals in the second half of 2020.
There have been 19 deals in that time worth US$17.62 billion, the largest of which was a US$6 billion issue from Delta Air Lines in September, according to Refinitiv data.
Global airlines are expected to refinance at least US$14.9 billion worth of bonds set to mature in 2021, Dealogic data showed, while a US$23.1 billion in syndicated loans will become due this year.
Cre: Reuters
Nguyen Xuan Nghia – COMM
