Singapore Airlines Raises S$2 Billion from Sale-and-Leaseback Transactions

Singapore National carrier, SIA in a press release on Monday announced, that it has successfully completed sale-and-leaseback transactions for eleven aircraft, including seven Airbus A350-900s and four Boeing B787-10s, raising approximately S$2.0 billion (US$1.5 billion).

The four different parties that participated in the transactions,  are:  Aergo Capital, Altavair, EastMerchant/Crianza Aviation and Muzinich and Co. Limited.

The deal with aircraft leasing company Aergo Capital includes one Airbus A350-900 and one Boeing 787-10 aircraft. Meanwhile, the transaction with aviation finance company Altavair involves four Airbus A350-900s.

The EastMerchant/Crianza Aviation deal includes one Airbus A350-900 and two Boeing 787-10s. EastMerchant is a provider of asset-based finance and management solutions for the airline industry, while Crianza Aviation is a high-value aircraft lessor and asset manager.

The deal with Muzinich and Co, a privately-owned, institutionally-focused investment firm, involves one Airbus A350-900 and one Boeing 787-10 aircraft.

“The additional liquidity from these sale-and-leaseback transactions reinforces our ability to navigate the impact of the COVID-19 pandemic from a position of strength,” Singapore Airlines Chief Executive Goh Choon Phong said in a statement.

Lacking a domestic travel market, SIA has been hit hard by the ongoing halt to international passenger travel due to border controls and strict quarantine regulations during the coronavirus pandemic.

Unfortunately, the current rise in Covid-19 in Singapore’s community has once again threatened the opening of a long-awaited travel bubble with Hong Kong currently set for May 26.

With the new case clusters hindering the re-opening of Singapore’s economy, shares of Singapore Airlines Ltd. dropped by 3.2% on Monday, the biggest drop in about two weeks.

In light of the successful transactions, SIA has been able to raise an estimated US$11.7 billion in fresh liquidity since April 1, 2020. The amount raised also includes US$6.6 billion from SIA’s successful rights issue, US$1.6 billion from secured financing, US$1.5 billion via the issuance of convertible bonds and notes, and more than US$375.7 million through newly-committed lines of credit and a short-term unsecured loan.

From its successful rights issue, US$5.3 billion was spent by December 2020, on items such as debt servicing, operating expenses and ticketing refunds to passengers.

The national carrier also mentioned that is had the option to further raise up to US$4.7 billion in mandatory convertible bonds before its Annual General Meeting in July 2021.

SIA further said that it will continue to “explore additional means to raise liquidity as necessary” in this period of high uncertainty, as the airline industry continues to navigate the “unprecedented challenges caused by the Covid-19 pandemic.”


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