©Reuters. FILE PHOTO: Singapore Airlines (SIA) planes sit on the tarmac at 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 $500 million bond at 5.25% maturing in 2034, according to a stock exchange filing.
Singapore’s flag carrier launched the U.S. Treasury deal on Thursday plus 110 basis points, within initial guidance of 150 bps, according to terms seen by Reuters on Thursday.
SIA said on Friday that the bonds will be issued at a price of 99.646% and will bear interest at a fixed rate of 5.25% per annum payable semi-annually. The notes are expected to be issued on March 21, he added.
“We believe this new issuance is fairly priced compared to SIA’s other outstanding U.S. dollar bonds,” Cyrus Ng, research analyst at Bondsupermart, wrote in a note on Thursday.
“Investors looking for a longer-dated bond (10 years) may find it attractive considering the general lack of longer-dated bonds in the airline sector,” he added.
Orders topped $4.5 billion, according to a message sent Thursday evening by the deal’s bankers.
The proceeds will be used for aircraft purchases and aircraft-related payments, as well as for general corporate or working capital purposes, including refinancing existing loans, SIA said.
SIA shares were down 0.5% at $6.39 on Friday morning, compared to a 0.4% decline in the local benchmark index.
Citigroup and DBS are joint global coordinators, along with HSBC and JP Morgan as joint bookrunners, the SIA said in Friday’s statement.
SIA is 53.44% owned by state investment company Temasek Holdings.