Singapore Aircraft Leasing Enterprise lines up second bond issue

The Singapore aircraft leasing company is set to issue S$200 million in five and seven-year bonds.

Singapore Aircraft Leasing Enterprise (SALE), the entity that leases airplanes to airlines worldwide, is set to launch its second bond deal with a S$200 million ($110 million) offering. United Overseas Bank Asia (UOB) and Keppel TatLee Bank have been mandated as co-leads for the transaction.

An official at UOB said that pricing for the deal would be set on Friday or early next week.

Proceeds from the deal will be used in the purchase of a new Boeing 777-200ER plane, which costs around $480 million. SALE will then use leasing revenues for the redemption of the bonds.

The transaction is being split up into two tranches: one with a maturity of five years and a longer dated ten-year bond. A source close to the deal said it was more than likely that the issue would be divided into two equally sized (S$100 million) pieces.

It will be the first time SALE has turned to the debt market since it made its debut in April 2000, when it issued S$65 million worth of seven-year bonds. The transaction, which was sole-lead managed by UOB, carries an annual coupon of 5%.

SALE was set up in 1993 by founding shareholders Singapore Airlines and Boullioun Aviation Services, the United States-based provider of aircraft leasing and financing. The two other major investors to jump on board since then are Temasek Holdings, the company set up to own and manage the Singapore government's direct investments, and the Government of Singapore Investment Corporation,the largest investment institution in the city state.

Between them, the four parties have put around $375 million in equity capital into SALE since it was established.