SIA mulling over possibility of raising funds in US$ bonds

Hong Kong

AS Singapore Airlines (SIA) Ltd considers broadening its debt sources amid plans to spend S$30.1 billion, some analysts are pointing to the likelihood of a shift to US-dollar bonds and the higher borrowing costs that may entail.

Chief financial officer Stephen Barnes said on May 19 that the carrier is looking to raise funds in different currency bonds. "Frankly, we will want to diversify," he said, without mentioning any specific currencies. While the local currency market has been "quite receptive" to its issues, the airline is in "no pressing hurry" to diversify its funding and will take its time over the next year or so to look at options, Mr Barnes said.

It would be "natural" for SIA to raise funds in US dollars given that the carrier's capital commitments are denominated in that currency, according to Ajith Kom, analyst at UOB Kay Hian Pte Ltd. The brokerage is assuming some increase in borrowing costs for add…