SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

Singapore International Airlines (SIA) reported a S$142mn ($106.1mn) net loss for the quarter ended December as passenger carriage was down 97.6% YoY due to border controls and travel restrictions. The group suffered a 76.1% drop YoY in revenue as its revenue fell by ~S$3.4bn ($2.54bn) to ~S$1.07bn ($0.8bn). Despite the losses, there was some good news for the world’s second-best carrier (after Qatar Airways). Passenger carriage rose 44.8% QoQ due to a 90.8% increase in capacity in the quarter. Further, the drop in passenger traffic was partially offset by cargo flights as it utilized 24 of its passenger aircraft as cargo flights. The group also managed to bring down its expenditures to S$1.4bn ($1.05bn) vs ~S$4bn ($2.99bn) last year due to reduction in fuel costs, non-fuel costs and government support schemes. While the net loss of S$142mn ($106.1mn) was down S$457mn ($341.4mn) YoY, it was significantly lower than the loss of S$2.34bn ($1.75bn) in the previous quarter.
SIA has a strong liquidity position to emerge from the crisis as it has raised ~S$13.3bn ($9.94bn) since the beginning of the fiscal year including $500mn raised via its debut dollar bond last month. The group also has access to ~S$2.1bn ($1.57bn) in committed credit lines, along with the option to raise ~S$6.2bn ($4.63bn) in additional mandatory convertible bonds. According to the release, “The SIA Group is well positioned to navigate the current uncertainties, cement our leading position in the airline industry in the new normal, will remain nimble and flexible as we look to seize all opportunities, and act swiftly and decisively in a fast-changing aviation environment.”
SIA’s bonds were flat with its 3.13% 2026s and 3.13% 2027s trading at 102.95 and 102.97 respectively.
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