Philippine Airlines (PAL) raised $300 million through its debut international bond offering, tapping global debt markets to fund its network expansion and fleet modernization following a successful financial turnaround.

The flag carrier’s wholly owned subsidiary, Primero Agila Limited, priced the $300 million five-year senior unsecured notes at a fixed coupon rate of 7.75 percent, according to a company statement on Wednesday, July 8.

The bonds, which will be listed on the Singapore Exchange, are unconditionally and irrevocably guaranteed by both PAL and its affiliate, Air Philippines Corp. At current exchange rates, the capital injection amounts to approximately ₱17.6 billion.

Investor demand for the dollar-denominated issuance reached more than $1.4 billion, or an oversubscription rate of about 4.5 times.

Lucio C. Tan III, president of the parent company PAL Holdings Inc., noted that the successful transaction demonstrates the significant progress the carrier has achieved during its multi-year transformation.

The fresh capital allows the company to strengthen its international footprint and continue elevating its customer travel experience, while reinforcing its role in driving Philippine tourism and trade, Tan said.

The transaction is the first rated high-yield bond issued by a Philippine corporate entity in over a decade. Additionally, the transaction stands as the first unsecured rated high-yield debt issued by an Asian airline, and the first-ever rated airline bond originating from South and Southeast Asia.

Prior to the launch, the notes received a below-investment-grade rating of Ba2 from Moody’s Ratings and a BB from Fitch Ratings, both with stable outlooks.

PAL President Richard Nuttall described the debut international issuance as a defining milestone that validates the airline’s market position and long-term strategic direction. The capital raising broadens PAL’s funding channels away from traditional commercial bank loans and establishes a direct pipeline to international fixed-income investors.

The proceeds will help support the airline’s international network expansion and ongoing fleet modernization. PAL is preparing to expand flights to North American hubs like New York, Toronto, and Vancouver, alongside launching a new route to Chicago later this year. The carrier is also weighing a major widebody aircraft order split between Boeing Co. 787s and Airbus SE A350s to sustain its post-pandemic growth momentum.

The transaction is scheduled to settle on or about July 16, 2026. Deutsche Bank AG acted as the sole global coordinator and rating advisor, while BNP Paribas SA served as the joint bookrunner for the offering. (James A. Loyola)