Singapore Airlines plans to issue $500 million of bonds at a discount to par.
This is the airline’s first ever US-dollar-denominated bond issue though it will not be offered in the US market, the group states in a 14 January filing to the Singapore Exchange.
“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 adds in a same-day press release.
The bonds, which the airline expects to issue on 20 January and will mature on 20 July 2026, has a 3% coupon and are being issued at 99.573% of their principal amount. They are callable from 20 June 2026, one month before maturity.
SIA will use the proceeds for aircraft purchases, related payments and other general purposes including refinancing of existing borrowings.
The bonds will be issued in denominations of $200,000 and in higher integral multiples of $1,000.
Citigroup was the sole global coordinator for the issuance. Citigroup, HSBC and BofA Securities were the joint bookrunners.
The company says the issuance was oversubscribed, with the final demand at more than $2.85 billion, “anchored by high quality institutional investors including real money asset managers”.
Since the start of the financial year ending 31 March, SIA has raised approximately S$13.3 billion ($10 billion) in additional liquidity, inclusive of the latest $500 million bond.
This includes S$8.8 billion from its rights issue, S$2 billion from secured financing, S$850 million via a recent convertible bond issue, another S$500 million via a private placement of new 10-year bonds, and more than S$500 million through new committed lines of credit and a short-term unsecured loan.
Including the new lines of credit, SIA says it will continue to have access to more than S$2.1 billion in committed credit lines. For the period up to July, the group also retains the option to raise up to S$6.2 billion in additional mandatory convertible bonds “that would provide further liquidity if necessary”.