SingTel said it plans to raise $1.5 billion in a debut global bond offering and proceeds will be used for the repayment of short-term debt and general corporate purposes.

SIA said it will raise S$800 million (US$444 million) through a 10-year bond issue to cover capital expenditures and working capital requirements.

The fund-raising announcements came a day after Singapore's DBS Group Holdings Ltd., Southeast Asia's biggest lender, raised S$2.2 billion in fresh capital from the sale of 228.83 ordinary shares to local and foreign investors.

DBS said proceeds from the share sale will be used to bolster its finances after acquiring Hong Kong's Dao Heng Bank in April.

The US-led global economic downturn has sent Singapore's trade-driven economy into its worst slump since independence in 1965.

SingTel said "the size, structure, timing and currencies of the offering will be dependent on prevailing market conditions and investor demand."

Applications have been made to list the notes on the Singapore Exchange Securities Trading Ltd. and on the Luxembourg Stock Exchange.

Citicorp Investment Bank and Goldman Sachs are acting as global joint coordinators and bookrunning lead-managers for the offering.

Global credit rating agency Moody's Investors Service immediately assigned an A1 senior unsecured rating to the proposed notes issue, which are being sold in privately-negotiated transactions.

Standard and Poor's assigned an 'AA-' rating and said the outlook was stable.

"The rating action reflects SingTel's leading market position with strong brand recognition, competitive cost position, and high consumer loyalty," Moody's said.

The Hongkong and Shanghai Banking Corp. Ltd. (HSBC) and Oversea-Chinese Banking Corp. Ltd. (OCBC) will act as joint lead managers for SIA's initial foray into the debt capital markets.

HSBC and OCBC will place the bonds, which will carry a fixed coupon, with investors in Singapore and overseas markets.

SIA said the bond issue represents the next phase of its planned restructuring of its capital base after the return of 609 million dollars in capital to shareholders in September.

The bond issue comes amid difficult times for SIA, which at its peak was one of the world's most profitable airlines.

SIA said on October 26 that it will defer aircraft deliveries after an 88.2 percent drop in group net profit to S$134.8 million (US$74.9) million in the six months to September.

The airline has said it faces its first annual profit loss at the end of the current financial year ending March after the September 11 terrorist attacks in the United States pummeled the global travel and cargo industries.

SIA shares closed flat at $8.15 dollars, with its announcement of further flight reductions to the US and Japan having been widely expected, dealers said. SingTel finished five cents down at 1.65.

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