Singapore Airlines has raised USD 500 million in its first US dollar bond issue which the company will use to buy new aircraft as the global aviation industry prepares for a post-pandemic travel rebound.
The transaction was finalised early today and the price was set at US treasuries plus 260 basis points, according to a statement from the airline.
“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 Singapore Airlines Chief Executive Officer, Goh Choon Phong.
The size of the five-and-a-half year deal was finalised after bookrunners received bids above USD 2.85 billion and the bond carries a 3% coupon rate, the statement 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.
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.
Singapore Airlines has raised SGD 13.3 billion (USD 10.04 billion) in new liquidity in the current financial year which ends in March, it said in the statement.