Singapore Airlines has raised US$500 million ($662.4 million) in its first US dollar bond issue, which the company will use to buy new aircraft as the global aviation industry prepares for a post-pandemic travel rebound.

The transaction was finalised early Thursday (Jan 14) and the price was set at US treasuries plus 260 basis points, according to a term sheet seen by Reuters.

The size of the 5.5 year deal was finalised after bookrunners received bids above US$1.5 billion, and the bond carries a 3% coupon rate, the term sheet shows.

Airlines are growing increasingly optimistic travel will resume later this year as a number of countries roll out vaccination campaigns to combat Covid-19.

Singapore Airlines is the first major airline in Asia to tap the global debt markets in 2021, following a rush of deals in the second half of 2020.

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There have been 19 deals in that time worth US$17.62 billion, the largest of which was a US$6 billion issue from Delta Air Lines in September, according to Refinitiv data. Global airlines are expected to refinance at least US$14.9 billion worth of bonds set to mature in 2021, Dealogic data showed, while US$23.1 billion in syndicated loans will become due this year.