Singapore Airlines launches leveraged sovereign play

Asian airline giant will make its debut in the local debt capital market today (Friday) with a deal that will price above 100bp over swaps.

Singapore Airlines SIA is to tap the debt capital markets for the first time with an S$800 million $440.4 million fixed-rate offering. HSBC and OCBC have been mandated as joint lead managers for the deal, which is likely to launch today.

The deal will have a 10-year maturity and domestic investors report that there is likely to be a yield of between 108bp to 112bp over swaps. At these levels, SIA will come about 20bp wider than Singapore Telecommunications whose S$1 billion 2006 issue is currently trading at 90bp over swaps on a fairly flat curve. Its bond will also represent the highest yielding government-related play in the Singapore bond universe.

Despite the...

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