SINGAPORE: Singapore Airlines (SIA) has raised S$850 million through a convertible bond issue, announced the national airline on Friday (Nov 13).
The offer was more than four times oversubscribed "with strong investor interest", said SIA in the media release.
READ: Singapore Airlines confident of having 'very strong liquidity' as it explores new sources of funds to tide through COVID-19: CEO
"As a result, the issuance was upsized from the initial S$750 million to S$850 million with more attractive terms for SIA," it added.
The five-year bonds, which have been placed with a variety of institutional investors, will carry a coupon of 1.625 per cent. They can also be converted into ordinary shares at a price of S$5.743.
This represents a 45.8 per cent increase from Thursday's closing price of S$3.94.
"This issuance further strengthens the company’s liquidity position, and bolsters its ability to navigate the challenges posed by the impact of the COVID-19 pandemic on the business," said SIA.
It added that proceeds from the bonds will be used to fund operating and capital expenditure, and debt servicing.
HSBC bank is the sole bookrunner and lead manager of the issue.
The airlines said that "positive discussions" have taken place on aircraft sale-and-leaseback transactions, and that it will continue to explore other means to "strengthen ... liquidity as necessary".
SIA has raised approximately S$12.2 billion since the start of the 2020/2021 financial year, including Friday's issuance.
The airlines said that for the period up to July next year, it retains the option to raise up to S$6.2 billion in additional mandatory convertible bonds that would provide further liquidity if necessary.
Earlier this week, SIA said it managed to reduce its monthly cash burn to “below S$300 million”, down from about S$350 million a month in the three months of May to July.
READ: SIA Group reports first half net loss of S$3.5 billion as passenger numbers fall by 98.9% amid COVID-19
In the release, CEO Goh Choon Phong said the placement was "successfully executed with a highly competitive coupon and substantial conversion premium".
"Such attractive terms for the company underscore the strong confidence that investors have in Singapore Airlines, as well as our ability to successfully overcome the near-term challenges and emerge as a leader in the airline industry,” added Mr Goh.
On Tuesday, SIA's share price rose as much as 21 per cent during intraday trading to a five-month high, as markets rallied on news that a vaccine candidate was 90 per cent effective in treating COVID-19 patients.