PAL raises $300 million ahead of plane order

MANILA, Philippines —  Flag carrier Philippine Airlines (PAL) has raised $300 million from the issuance of senior notes, boosting its war chest ahead of a reported purchase of a new batch of widebody aircraft.

PAL’s subsidiary Primero Agila Ltd. yesterday confirmed that it had priced its landmark offering of $300 million in five-year senior notes.

The notes carry a coupon of 7.75 percent and are guaranteed by PAL and Air Philippines Corp.

PAL said the notes, with a yield of eight percent, will be listed on the Singapore Exchange Securities Trading Ltd. The issuance will be settled on July 16, with maturity on July 16, 2031.

PAL’s bond sale received a BB rating from Fitch Ratings, with the airline continuing to strengthen its financial position following its pandemic-era restructuring.

The carrier is also rebuilding its fleet and requires fresh funds for aircraft acquisitions.

In a report, Bloomberg said PAL is likely to place a firm order for 10 Boeing 787s and 10 Airbus A350s, a move that would further strengthen the airline’s dominance in the long-haul market.

However, PAL chief operating officer Carlos Luis Fernandez said the airline is still weighing its options regarding the reported order, declining to provide details on its current plans.

“Nothing final yet in our plans. We are in a process,” Fernandez told The STAR.