Singapore Airlines Launches US Dollar Debt Debut

Singapore Airlines
FILE PHOTO: A logo is pictured on a seat of a Singapore Airlines Airbus A350 at the gate at JFK airport before a scheduled direct flight to Singapore in the Queens borough of New York City, New York, U.S., November 11, 2020. REUTERS/Carlo Allegri/File Photo

HONG KONG — Singapore Airlines launched its first US dollar bond on Wednesday to help fund the purchase of new aircraft, according to a term sheet seen by Reuters.

The size of the deal has yet to be officially set but is expected to be a ‘benchmark’ transaction which means it should raise at least $300 million, according to a source with direct knowledge of the matter. 

A final size will be calculated once investors have placed their orders, the person said. The source could not be named as the information had not yet been made public.

Investors have been told the initial price guidance for the 5.5 year deal is set at the US treasury yield plus 300 basis points. 

The company held calls with investors in Asia and Europe on Monday to chart demand for the deal to go ahead which will be the first of its kind for the airline.

The term sheet said the funds raised would be used for new aircraft purchases and ‘aircraft related payments’.

Singapore Airlines has traditionally issued debt in its local currency but the deal, which cannot be sold to investors in the United States, will help the airline diversify its funding sources, according to people working on the deal who were not authorised to speak to media.

The airline said on Monday its December passenger capacity was down 81.3% compared to the same time last year.

It said it expected its passenger levels by the end of March to be about 25% of its pre-COVID levels and it would fly to nearly 45% per cent of its pre-crisis destinations.

Reporting by Scott Murdoch in Hong Kong and Anshuman Daga in Singapore; Editing by Michael Perry; Reuters


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