AirAsia Plans $1 Billion Bond Program to Finance Debt, Planes

  • Notes could be issued in U.S. dollars or other currencies
  • Move comes after weak ringgit contributed to quarterly loss

AirAsia Bhd., Southeast Asia’s biggest budget carrier, plans to raise as much as $1 billion under a multi-currency medium-term note program to refinance debt and buy airplanes after last year’s plunge in the Malaysian ringgit pushed the carrier to a third-quarter net loss.

The airline’s AirAsia Global Notes Ltd. unit can issue bonds under the program in U.S. dollars or other currencies, AirAsia said Wednesday in an exchange filing in Kuala Lumpur. Deal managers Barclays Bank Plc, CIMB Group Holdings Bhd. and RHB Investment Bank Bhd. will start arranging investor meetings in Singapore, Hong Kong and London from Jan. 7, the airline said.

Shares of AirAsia have plunged about 45 percent in the past year, hit by a June 10 report from GMT Research questioning the carrier’s accounting and exacerbated by ringgit depreciation, mounting competition and a December 2014 plane crash at its Indonesian affiliate. The company slipped to a net loss of 405.7 million ringgit ($92.5 million) in the quarter through September after suffering losses from foreign exchange and its Indonesian associates.

AirAsia was up 2.2 percent to 1.37 ringgit as of 3:40 p.m. in Kuala Lumpur, compared with a 0.6 percent gain in the benchmark FTSE Bursa Malaysia KLCI Index.

Proceeds from the bond sale will be used to refinance debt and fund aircraft purchases or other investment opportunities, the company said. The notes will be offered and sold outside the U.S., AirAsia said, citing U.S. securities regulations.

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