We had previously written on SIA’s Mandatory Convertible Bonds (MCBs). Feel free to read it first if you need a refresher.

• 1^st October 2020: Singapore Airlines’ Mandatory Convertible Bonds (MCBs) are now yielding 7-8% p.a. Are they a good buy?

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Summary On 13 Nov 2020 (Fri), SIA announced that it had raised S$850m via a convertible bond issue, which was 4x oversubscribed given strong interest from institutional investors.

• Link to Article from The Straits Times
• Link to SIA’s SGX Annoucement

The word “SIA convertible bond” surely caused a nervous stir for investors holding SIA’s Mandatory Convertible Bond (MCBs) and SIA stock, who have been anticipating a potential announcement of a second tranche of MCB issuance – a clear negative for SIA’s MCBs and stock prices if it happens. Fortunately, this announcement is not it… “Convertible Bonds” are quite different from “Mandatory Convertible Bonds (MCBs)” and in this article, we will explain the difference between the two, and if the newly issued convertible bonds are cheap....