Furore
2022-10-29

$SINGAPORE AIRLINES LTD(C6L.SI)$ announces intention to redeem first tranche of mandatory convertible bonds (MCBs)

SIA will be redeeming the first tranche of its MCBs (S$3.5bn) at the accreted principal amount, being 110.4% of the principal amount (2.5 years of accumulated interest) in December-22. SIA is expected to redeem the first tranche of its MCBs in 2023 (FY24), given that the step-up in yield on the MCB is slated to only occur in in 2024 (FY25).

Early redemption of the MCBs is supported by SIA's substantial cash position (S$16.1bn of cash as of June-22, but the amount is likely to be higher now) and significant improvement in operating cash flows. This suggests that the management team is optimistic on SIA's outlook.

Additionally, this also substantiates the assumption of resumption of dividend payments (dividends per share expected to be at 20Scts in FY23; implied dividend yield of 4.0% at current share price levels) in FY23.

The redemption of the next tranche of its MCBs will occur sooner rather than later (even though the step-up in interest rates will only occur in 2025(FY26)), given the strong financial position and solid medium-term prospects of the group.

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Comments

  • DannDann
    2022-10-30
    DannDann
    Excellent sharing. Very insightful. Thumbs up 👍🏻👍
  • Ericdao
    2022-10-30
    Ericdao
    Good to hear. SIA should start to fly high again
    • Furore
      I have the same feeling too hahaha
  • HLPA
    2022-10-30
    HLPA
    Still a great way to fly!
    • HLPAReplyFurore
      Yes SIA has lots of space to grow to get to precovid levels
    • Furore
      A lot of space to fly too
      Stock has been too depressed
      Even the American airliner stocks have surged, SIA is still lagging behind
      I personally take that as a sign of greater upside potential lol
  • Furore
    2022-10-29
    Furore
    Time to finally fly hahaha
  • kokakun
    2022-10-29
    kokakun
    Let's go
  • JaniceZhu
    2022-10-31
    JaniceZhu
    此外,这也证实了恢复股息支付的假设(2013财年每股股息预计为20美分;在当前股价水平下,隐含股息收益率为4.0%)。
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