Philippine Airlines (PAL) has raised $300 million from its first international bond offering, securing fresh capital as it expands its global network with new and additional flights across the Middle East, North America, Japan and Australia.

In a disclosure on Wednesday, PAL said its wholly owned subsidiary, Primero Agila Limited, successfully priced its inaugural fixed-rate $300 million five-year Senior Notes at a 7.75 percent coupon.

The notes will mature on 16 July 2031 and carry a yield of 8.00 percent, with a re-offer price of 98.986. Settlement is scheduled on 16 July.

The notes will be unconditionally and irrevocably guaranteed by PAL and Air Philippines Corp. and will be listed on the Singapore Exchange Securities Trading Limited.

Landmark bond offering

“This landmark bond offering is a powerful affirmation of Philippine Airlines’ transformation and the confidence that global investors have in our long-term vision and growth ambitions. This allows us to strengthen our network and continue to elevate the travel experience for our customers,” PAL Holdings Inc. president Lucio C. Tan III said.

For his part, PAL president Richard Nuttall said the strong response from international investors validates the airline’s long-term strategy and growth prospects.

“This inaugural international bond offering marks a defining milestone in Philippine Airlines’ ongoing transformation. We are grateful for the overwhelming support we received from investors globally, which we see as a vote of confidence in PAL’s long-term strategy, market position and growth outlook,” said Nuttall.

International expansion

The fundraising comes as PAL steps up its international expansion to meet rising demand from overseas Filipino workers, business travelers, tourists, and cargo customers.

Beginning 2 October, the airline will restore nonstop Manila-Dubai flights with four weekly services, with plans to eventually increase the route to daily operations.

PAL is also expanding its North American network by increasing flights to Vancouver, Toronto and New York later this year, while launching thrice-weekly Manila-Chicago services in November.

For the year-end travel season, the flag carrier will add more flights to Tokyo, Osaka and Sapporo, raising its Japan network to as many as 87 weekly flights while also increasing services to Australia.