SIA’s mandatory convertible bonds worth a look now as yield rises, recovery takes off

MANDATORY convertible bonds (MCBs) sold by Singapore Airlines : C6L 0% (SIA) over the last 2 years could offer an interesting investing opportunity amid growing optimism that the carrier is firmly on a recovery track.

On Monday (May 23), the MCBs issued in 2020 were trading marginally below par, at S$0.990. The 2021 tranche of MCBs was trading at S$0.958.

The zero-coupon MCBs worth S$9.7 billion in total issue value with maturity in 2030 were liquidity lifelines for the mainboard-listed airline when it was pummelled by the pandemic and navigating the toughest year in its history in 2020.