By Scott Murdoch and Yantoultra Ngui
SYDNEY (Reuters) – Singapore Airlines or SIA has launched a $500 million 10-year dollar bond at U.S Treasuries plus 110 basis points, according to a term sheet seen by Reuters on Thursday.
Initial price guidance for the deal has been set at the 10-year U.S. Treasury rate plus 150 basis points, a separate term sheet seen by Reuters earlier on Thursday showed.
“We think this new issue is fairly priced relative to other outstanding U.S. dollar bonds from SIA,” Cyrus Ng, a research analyst at Bondsupermart, wrote in a note on Thursday.
“Investors who are looking for a longer-dated bond (10-year) may find this bond interesting considering the general lack of longer-tenor bonds within the airline industry,” he added.
Orders reached over $4.5 billion, according to a book message sent by the deal’s bankers.
Proceeds will be used for aircraft purchases and aircraft related payments, general corporate or working capital purposes, including refinancing of existing borrowings, according to the term sheet.
“At this juncture, a 10-year U.S. dollar bond issuance looks attractive,” a Singapore Airlines spokeperson said, adding the company regularly reviewed its funding requirements versus its existing cash position.
Citigroup and DBS are joint global coordinators, together with HSBC and JP Morgan as joint bookrunners, the term sheet showed.
SIA is Singapore’s flag carrier and 53.44% owned by the country’s state investment firm Temasek Holdings.
(Reporting by Scott Murdoch in Sydney and Yantoultra Ngui in Singapore; Editing by Kim Coghill and Chizu Nomiyama)
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