© Reuters. FILE PHOTO: Singapore Airlines (SIA) planes sit on the tarmac in Singapore’s Changi Airport March 3, 2016. REUTERS/Edgar Su/File Photo
By Scott Murdoch and Yantoultra Ngui
SYDNEY/SINGAPORE (Reuters) -Singapore Airlines said on Friday it has priced a 5.25% $500 million U.S dollar bond due in 2034, according to a stock exchange filing.
Singapore’s flag carrier launched the on Thursday at U.S Treasuries plus 110 basis points, within initial guidance of 150 bps, according to term sheets seen by Reuters on Thursday.
SIA said on Friday the notes will be issued at a price of 99.646% and bear interest at a fixed rate of 5.25% per annum payable semi-annually. The notes are expected to be issued on March 21, it added.
“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 on Thursday evening.
Proceeds will be used for aircraft purchases and aircraft related payments, and general corporate or working capital purposes, including refinancing of existing borrowings, SIA said.
Shares of SIA were 0.5% lower at $S6.39 on Friday morning, versus the local benchmark index’s 0.4% decline.
Citigroup and DBS are joint global coordinators, together with HSBC and JP Morgan as joint bookrunners, according to SIA in the Friday’s statement.
SIA is 53.44% owned by the country’s state investment firm Temasek Holdings.
