PAL increase bond offer to $350M

MANILA, Philippines — Philippine Airlines (PAL) is increasing its maiden international bond sale by $50 million, days after major aircraft orders with Boeing and Airbus.

In a disclosure on Friday, PAL said its Cayman Islands unit, Primero Agila Ltd., priced the additional $50 million in fixed-rate, five-year senior notes, to be listed on the Singapore Exchange.

READ: PAL raises $300M from int’l bond offer

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Primero Agila will add the additional notes into its $300 million 7.75 percent senior notes due 2031, which drew over $1.4 billion in orders—about 4.5 times the base offering.

PAL said the additional notes, priced on July 31, will settle on Aug. 6. Like the initial issuance, the notes carry a 7.75 percent coupon, with a reopening yield of 7.997 percent and price of 99.

The notes will be unconditionally and irrevocably guaranteed by PAL and Air Philippines Corp.

During the initial $300-million offering, PAL president Richard Nuttall said the airline’s international debt market debut was a “milestone” and a “vote of confidence” in its long-term strategy, market position and growth outlook.

The expanded bond offering follows PAL’s major aircraft orders from Boeing and Airbus at the Farnborough International Airshow.

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In its first Boeing order since 2007, Philippine Airlines (PAL) bought 15 787-10 Dreamliners, with options for five more. Boeing will deliver the aircraft between 2031 and 2034.

At the same airshow, Philippine Airlines (PAL) ordered nine Airbus A350-1000s, with options for five more, to expand its long-haul fleet.

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The Airbus will deliver the aircraft between 2034 and 2036. If PAL exercises all of its purchase options, its A350-1000 fleet will grow to 23 aircraft. The airline remains the only carrier in Southeast Asia to operate the aircraft type.