SIA boosts liquidity by $500 million bond issue

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Singapore Airlines (SIA1) (SINGY) (SIA) raised $500 million via its first United States dollar bond issue and strengthened its liquidity position. The airline plans to use the recent bond for aircraft purchases as well as for other general purposes including refinancing of existing debts.

The flag carrier of Singapore raised $500 million in its first US dollar bond issue, finalizing the transaction on January 14, 2021. Singapore Airlines (SIA1) (SINGY) is preparing for a post-pandemic travel rebound and expects to use the proceedings to buy new aircraft and to refinance existing debts. 

The recent deal further strengthened SIA’s liquidity position and provided the airline with the financial flexibility to “capture medium-to-long-term growth beyond the COVID-19 pandemic,” read the company’s statement. The price of a bond issue was set at 99.5% of their principal amount, with a maturity date of July 20, 2026.

“We thank our investors for their strong support of Singapore Airlines’ (SIA1) (SINGY) debut issuance of US-dollar bonds. We are confident that this will further strengthen SIA’s competitive advantage in the industry, and bolster our ability to emerge stronger from the challenges posed by the COVID-19 pandemic,” the Chief Executive Officer (CEO) of Singapore Airlines Goh Choon was quoted as saying. 

Since March 2020, SIA has raised up to $10 billion to stabilize its liquidity position to outlast the current downturn in travel. The airline gained $6.6 billion from a rights issue back in June 2020. Singapore Airlines (SIA1) (SINGY) has already used up a majority of its raised cash to fund its ongoing operating expenses, ticket refunds, and debt servicing. 

The carrier has also raised another $1.5 billion from secured financing, $640 million via a convertible bond issue as well as over $376 million through a private placement of new 10-year committed credit lines and a short-term unsecured loan.

In late-December 2020, the Civil Aviation Authority of Singapore (CAAS) issued new support measures to revive Singapore’s aviation as well as to help airlines and workers of the sector.


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