Singapore Airlines raises SGD850 million through convertible bond issue

SINGAPORE (CNA) – Singapore Airlines (SIA) has raised SGD850 million through a convertible bond issue, announced the national airline yesterday.

The offer was more than four times oversubscribed “with strong investor interest”, said SIA in the media release.

“As a result, the issuance was upsized from the initial SGD750 million to SGD850 million with more attractive terms for SIA,” it added.

The five-year bonds, which have been placed with a variety of institutional investors, will carry a coupon of 1.625 per cent. They can also be converted into ordinary shares at a price of SGD5.743.

This represents a 45.8 per cent increase from Thursday’s closing price of SGD3.94.

Proceeds from the bonds will be used to fund operating and capital expenditure, and debt servicing, SIA said. PHOTO: AFP

“This issuance further strengthens the company’s liquidity position, and bolsters its ability to navigate the challenges posed by the impact of the COVID-19 pandemic on the business,” said SIA.

It added that proceeds from the bonds will be used to fund operating and capital expenditure, and debt servicing.

HSBC bank is the sole bookrunner and lead manager of the issue.

The airlines said that “positive discussions” have taken place on aircraft sale-and-leaseback transactions, and that it will continue to explore other means to “strengthen … liquidity as necessary”.

SIA has raised approximately SGD12.2 billion since the start of the 2020/2021 financial year, including yesterday’s issuance.