Introduction

SIA shareholders would have received a corporate action regarding the rights issue of a 2nd tranche of MCBs (aka Rights 2021 MCBs), and many have asked if it’s worth subscribing to.

For reference, SIA’s MCBs were NOT popular at all when the 1st tranche came out in 2020. 96% of the 1st tranche of MCBs issued in 2020 was taken up by Temasek (despite Temasek only owning 55% of SIA), as the 2020 MCBs were severely under-subscribed by investors.

This serves as a gauge for investor opinion at that point in time, and in our opinion, sentiment is unlikely to have shifted much from then.

Many have taken the view SIA’s recovery will not come quickly enough, given Singapore’s lack of domestic routes that other airlines in countries like China, US and Australia can rely on.