MIAMI – Singapore Airlines (SQ) has successfully raised US$850m via the issuing of convertible bonds and placed with a variety of institutional investors.
The offer was more than four times oversubscribed with strong investor interest. As a result, the issuance was upsized from the initial US$750m to US$850m with more attractive terms for SQ.
The five-year bonds will carry a competitive coupon of 1.625%, and can be converted into ordinary shares at a price of US$5.743, a significant premium of 45.8% over the 12 November 2020 closing price of US$3.94.
The Company appointed The Hong Kong and Shanghai Banking Corporation (HSBC) as the sole bookrunner and lead manager of the issue.
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.
According to the company, the bonds will be used to fund operating and capital expenditure, and debt servicing.
Since the start of the 2020/2021 financial year, including today’s issuance, SQ has raised approximately US$12.2bn.
This includes US$8.8bn from SQ’s successful rights issue, US$2bn from secured financing, and more than US$500m through new committed lines of credit and a short-term unsecured loan. Including the new lines of credit, SQ will continue to have access to more than US$2.1bn in committed credit lines.
For the period up to July 2021, the Company also retains the option to raise up to US$6.2bn in additional mandatory convertible bonds that would provide further liquidity if necessary.
Statement from Singapore Airlines
Goh Choon Phong, CEO at SQ, 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 SQ, as well as our ability to successfully overcome the near-term challenges and emerge as a leader in the airline industry.”
Featured image: Aidan Pullino