China Eastern Airlines Corp reportedly plans to issue up to CNY8 billion (USD1.2 billion) of bonds in Hong Kong this month, the first mainland carrier to issue yuan debt in Hong Kong (South China Morning Post, 05-Jul-2011). The lower interest rate in Hong Kong could reportedly save the carrier up to CNY300 million (USD46.4 million) in interest expenses this year. The carrier has reportedly hired Deutsche Bank, HSBC and China International Capital Corp to arrange the bond issue, which is scheduled to be launched this month, targeting institutional investors. Details of the bond are yet to be finalised but the airline intends to offer the bond at a term of three to five years, with an annual interest rate near 3%, which is at least 300 basis points short of the interest rate on the mainland.
5-Jul-2011 9:47 AM