• Joe Breitfeller

Singapore Airlines Raises S$850 Million Through Convertible Bond Issue

The airline has raised $$850 million with strong investor support for their convertible bond issue which has been placed with a variety of institutional investors. The offer for the five year bonds with a 1.625% coupon were oversubscribed by over four times.

Singapore Airlines Boeing 787-10 Dreamliner - Courtesy SIA

On Friday (November 13, 2020), Singapore Airlines (SIA) announced that they have raised S$850 million (US$ 630.7 million) via a convertible bond issue placed with a variety of institutional investors. The five-year convertible bond issue was oversubscribed by more than four times. The bonds have a coupon of 1.625% and can be converted to ordinary shares at S$5.743, a premium of 45.8% over the November 12, 2020 closing price. The bond issue further strengthens SIA’s liquidity position as the company navigates the global COVID-19 pandemic. In Friday’s announcement, Singapore Airlines’ Chief Executive Officer, Goh Choon Phong, said,

“We would like to thank investors for the strong support. The placement was successfully executed with a highly competitive coupon and substantial conversion premium. Such attractive terms for the company underscore the strong confidence that investors have in Singapore Airlines, as well as our ability to successfully overcome the near-term challenges and emerge as a leader in the airline industry.”

The proceeds from the bond issue will be used to fund operations and for CAPEX spending and debt servicing. SIA continues to explore further measures to enhance liquidity including sale-and-leaseback transactions and other initiatives. Including today’s bond issue, Singapore Airlines has raised approximately S$12.2 billion (US$ 9.05 billion) during FY 2020/21. The company continues to have access to committed credit lines of S$2.1 billion (US$1.6 billion) and retains the option to raise up to S$6.2 billion (US$4.6 billion) in mandatory convertible bonds through July 2021, if necessary.

Source: Singapore Airlines