Singapore Airlines taps bond market

APAS Aircraft Storage Alice Springs
Airlines like Singapore Airlines are bringing planes out of storage as traffic improves with the removal of some COVID restrictions. (PHOTO: Steve Strike/Outback Photographics)

New New SingaporeSingapore Airlines said on Thursday (13 January) that it raised US$600 million in a US dollar bond deal it plans to use to buy aircraft and repay existing debt as it continues to suffer from a hobbled international aviation environment due to the COVID-19 pandemic and Omicron variant outbreak.

The seven-year notes have a coupon of 3.375 percent. A year ago, it raised US$500 million in a five-year issue with a 3 percent coupon. The airline was aiming to raise between US$500 million and US$750 million, according to a Reuters report. Before this offering, the airline had raised S$21.6 billion (US$16 billion) of liquidity during the pandemic and had untapped debt facilities of S$2.1 billion as of 30 September.

Singapore Airlines has been particularly hard hit by the COVID-19 pandemic due to its lack of a domestic market and the near total shutdown in international aviation through the first year to 18 months of the pandemic. It has seen a small uptick in demand as vaccinations have risen around the world but the Omicron variant slammed the door on several countries that put in place either outright border closures or reimposed quarantines. The Singapore government last month froze the sale of tickets for arriving flights under its quarantine-free travel programme for four weeks, citing the risk from the fast-spreading Omicron variant. Though still below its pre-pandemic level, the number of passengers at Changi Airport rose over the course of 2021. Singapore Airlines recorded a “meaningful increase in traffic,” though the onset of the Omicron coronavirus variant led to a temporary suspension of quarantine-free travel.

Singapore Airlines isn’t the only Asian carrier looking to tap funds, according to Bloomberg and Reuters. Korean Air Lines is marketing a Samurai bond, which is guaranteed by the Export-Import Bank of Korea, at 0.45 percent. It is to be priced on Friday.

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