Updated March 15th, 2024 at 09:08 IST

Singapore Airlines prices $500 million 10-year dollar bond amid strong investor interest

The carrier launched the 10-year bond on Thursday at a spread of 110 basis points over US Treasuries, an improvement from the initial guidance of 150 bps.

Reported by: Business Desk
SIA issues bond | Image:Shutterstock
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SIA issues bond: Singapore Airlines has priced a $500 million US dollar bond due in 2034, with a fixed interest rate of 5.25 per cent per annum, as disclosed in a filing with the stock exchange on Friday.

The carrier launched the 10-year bond on Thursday at a spread of 110 basis points over US Treasuries, an improvement from the initial guidance of 150 bps, according to documents seen by Reuters.

Bond issuance details

The bonds are set to be issued at 99.646 per cent of their face value and will bear interest at a fixed rate of 5.25 per cent per annum, payable semi-annually. They are expected to be issued on March 21.

Cyrus Ng, a research analyst at Bondsupermart, noted that the new bond appears reasonably priced compared to existing US dollar bonds from Singapore Airlines. He also highlighted the attractiveness of a longer-term bond, given the scarcity of such offerings in the airline industry.

Demand for the bond exceeded $4.5 billion, according to a message from the deal's bankers on Thursday evening.

Proceeds from the bond issuance will be utilised for aircraft purchases, related payments, and general corporate expenses, including refinancing existing borrowings, Singapore Airlines stated.

SIA stock performance

On Friday morning, Singapore Airlines shares were down 0.5 per cent to $S6.39, slightly underperforming the broader market's 0.4 per cent decline.

Citigroup and DBS are acting as joint global coordinators, with HSBC and JP Morgan serving as joint bookrunners, according to Singapore Airlines' statement on Friday.

Singapore Airlines is majority-owned by Temasek Holdings, holding a 53.44 per cent stake.

(With Reueters Inputs)

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Published March 15th, 2024 at 09:08 IST