China Air, China’s national flag carrier, has accepted a bond offering guaranteed by the US Export-Import-Bank, or US-Exim.
The deal, worth $135.31 million, brings into play a new capital market financing solution to airline companies in Asia-Pacific. All gains from the transaction will be put towards refinancing a financial lease structure which was used to purchase a new Boeing 777-300ER aircraft by Air China.
“We are glad to be able to further develop and explore a wider source of funding,” said Jingjing Yao of Air China’s finance department. “The notes offered us a relatively low funding cost as the coupon is the lowest when comparing to transactions with equivalent average life since the product began in October 2009.”
The notes, due in 2023, are priced at a coupon of mid-swap rate, in addition to 105bp alongside market expectations. Eight investors have placed orders, reaching a total of $142 million.