Philippine Airlines raises $300 million in global bond offering

Investor demand exceeds PAL’s target by 4.5 times as the flag carrier secures fresh funding for expansion and fleet modernization.

Philippine Airlines raised US$300 million through its inaugural international bond offering after attracting more than US$1.4 billion in investor orders, a strong vote of confidence from global investors that gives the flag carrier fresh funding for its next phase of growth.

The five-year senior unsecured guaranteed bonds carry a fixed 7.75% coupon and were oversubscribed about 4.5 times, with demand far exceeding the amount PAL planned to raise. The bonds will be issued through PAL’s wholly owned subsidiary, Primero Agila Limited, guaranteed by Philippine Airlines and Air Philippines Corporation, and listed on the Singapore Exchange. The transaction is expected to settle on or about July 16.

The fundraising gives PAL another source of capital as it expands its international network and modernizes its fleet, investments that could improve connectivity for travelers while supporting tourism, trade and businesses that depend on air travel. Direct access to international capital markets also gives the airline greater flexibility to raise funding beyond traditional bank financing.

PAL said the offering is the first rated high-yield bond issued by a Philippine company in more than a decade, the first unsecured rated high-yield bond by an Asian airline, and the first rated airline bond from South and Southeast Asia.

The airline said the strong investor demand builds on its financial turnaround, sustained profitability, fleet modernization and improved credit ratings in recent years as it marks its 85th year of operations.