Singapore Airlines aims to raise $600 million through the issue of bonds due in 2029.

The bonds will carry a coupon of 3.38% and fall under the ambit of its $10 billion multicurrency medium term note programme, says the carrier.

SIA Airbus A350

Source: Greg Waldron/FlightGlobal

A Singapore Airlines A350-900ULR at Changi Airport in December 2021

The bonds will be issued at 99.3% of par value, and are expected to be issued on 19 January 2022.

“The net proceeds from the issue of the notes under the programme (after deducting issue expenses) will be used by the company for aircraft purchases and aircraft related payments and general corporate or working capital purposes, including refinancing of existing borrowings of the company,” says SIA.

The airline conducted a similar bond issue in January 2021 that raised $500 million. That issue, due in 2026, was discounted to 99.6%, and mature in 2026.

Amid steep losses owing to government travel restrictions intended to hold back the coronavirus pandemic, SIA has suffered substantial losses, and has been active in shoring up its capital position.

As of September 2021, it said that it had raised over S$21.6 billion ($16 billion) in fresh liquidity. It also said that it had fully utilised S$8.8 billion of the gross proceeds from a June 2020 rights issue.

A convertible bond issue in June 2021 netted the carrier $6.2 billion in additional liquidity. This issue was strongly supported by Singapore sovereign wealth fund Temasek Holdings, despite being undersubscribed by a considerable margin, with only 58.9% of shareholders taking up the offering.