Singapore Airlines, one of the world's leading airlines, is reportedly planning to raise funds through a 10-year bond issuance in US dollars. According to a term sheet, the initial yield target for the bond issuance is set at 150 basis points above the current 10-year US Treasury rate. The offering is expected to reach up to US$500 million, however, early indications suggest strong investor interest with over US$1 billion in orders already received.
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This strategic move comes as Singapore Airlines reviews its funding needs and seeks to maintain a healthy cash flow position. A spokesperson for the airline confirmed that the bond issuance is being considered, and highlighted the company's focus on prudent financial management. The spokesperson also stated that the proceeds from the bond sale would be used for a variety of purposes, including financing aircraft purchases and potentially refinancing existing debt.
To ensure the success of this bond issuance, Singapore Airlines has enlisted the services of top financial institutions such as Citigroup, DBS, HSBC, and JPMorgan as joint global coordinators and bookrunners. This suggests that the offering is well-supported and has the potential to be a success.
In summary, Singapore Airlines' move to raise funds through a 10-year bond issuance in US dollars is a strategic decision that will enable the airline to finance its growth plans while maintaining a strong financial position. The bond issuance is expected to be a success, given the strong investor interest and the support of top financial institutions.