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15-Mar-2011 9:48 AM

Chinese airlines moving to bond sales as cost of financing increases

China Eastern Airlines chairman Liu Shaoyong commented that China's tighter economic policies "have raised the cost of financing" (Bloomberg, 15-Mar-2011). In Feb-2011, China Eastern Air Holding Co sold CNY500 million (USD76.1 million) of 5.31% five-year bonds. China National Aviation Holding Co, parent of Air China, and Hainan Airlines Co, disclosed plans last week to offer a combined CNY15 billion (USD2.3 billion) of bonds this year. Yields on Chinese airline bonds are approaching their highest level in 14 months.