Mar 14 2024 Singapore Airlines (SIA) is in the process of readying a $500 million 10-year dollar bond, as disclosed by a term sheet obtained by Reuters on Thursday. The bond is structured at a rate of U.S Treasuries plus 110 basis points, with an initial price guidance of the 10-year U.S. Treasury rate plus 150 basis points, as indicated in an earlier term sheet also obtained by Reuters on the same day.
A Thursday report by Cyrus Ng, a research analyst at Bondsupermart, suggested that the new bond appears reasonably priced in comparison to existing U.S. dollar bonds from SIA. Ng highlighted its potential appeal to investors seeking longer-term options (10-year), given the scarcity of such bonds in the airline industry.
Orders for the bond surged to over $4.5 billion, according to a message from the deal’s bankers. The funds raised from the issuance are earmarked for aircraft purchases, aircraft-related payments, general corporate or working capital needs, and refinancing existing borrowings, according to the term sheet.
A spokesperson from Singapore Airlines commented on the attractiveness of the 10-year U.S. dollar bond issuance at present, emphasizing the company’s ongoing assessment of its funding requirements in comparison to its existing cash reserves.
Citigroup and DBS are acting as joint global coordinators for the issuance, with HSBC and JP Morgan serving as joint bookrunners, as outlined in the term sheet. SIA, Singapore’s flag carrier, is majority-owned by Temasek Holdings, the country’s state investment firm, holding a 53.44% stake in the airline.
