Singapore Airlines plans debut 5-year dim sum bond

[SINGAPORE] Singapore Airlines on Monday (Jun 22) said it plans to sell its first five-year benchmark dim sum bond, an offshore yuan bond issued outside mainland China, and has hired four banks to arrange the potential deal.

Benchmark-sized deals in the offshore yuan bond market are usually at least US$147.6 million, meaning they are large enough to be easily traded by investors. Singapore Airlines has not disclosed the planned size.

The airline said it tapped Bank of China, DBS, HSBC and Standard Chartered for the potential bond sale. Reuters reported the decisions earlier on Monday, citing a document on the matter.

“We have been monitoring the offshore renminbi (CNH) market and view current conditions as favourable for a CNH bond issuance,” the company said in an emailed statement to Reuters. CNH refers to yuan traded outside mainland China.

The planned deal will be a debut five-year CNH benchmark bond under the airline’s existing S$10 billion medium-term note programme, Singapore Airlines said.

Proceeds will be used for aircraft purchases and related payments, general corporate or working capital needs and refinancing existing borrowings, it added.

Singapore Airlines said execution is expected to take place over two days, with the final size and coupon – or interest rate paid to investors – to be set at pricing.

“Singapore Airlines regularly reviews its funding needs against its cash position,” it said. “We maintain regular access to the capital markets and tap them when conditions are favourable.”

It said that further details would be provided in a Singapore Exchange announcement once the transaction has been priced.

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A document seen by Reuters earlier on Monday showed the airline was holding a global investor call on Monday. The deal could launch as early as Tuesday, subject to market conditions, the document showed.

The airline tapped the bond market in January, selling S$500 million of 10-year notes. REUTERS