CALC Floats $500MM Bond Issue to Acquire Aircraft, Expand Business



China Aircraft Leasing Group Holdings (CALC) will issue 5-year $300 million and 7-year $200 million unrated and unsecured bonds, which bear an interest rate of 4.7% and 5.5% respectively. The bonds are guaranteed by CALC.

The net proceeds of the bond issues will amount to approximately $496.2 million, to be used for aircraft acquisitions, business expansion of the company’s aircraft and related businesses and general working capital.

For the 5-year bonds, 40% of the investor base is from fund management and insurance companies, 35% from banks and 25% from private banking investors. Asian and European investors account for 82% and 18% of the subscription respectively. For the 7-year bonds, the composition is 45%, 39% and 16%. Asian and European investors account for 78% and 22% of the subscription respectively.

Barry MOK, deputy chief executive officer and chief financial officer of CALC, said, “Following the placement of the 3-year and 5-year USD bonds last year, the bonds issued this time have a longer maturity and fixed interest rate, and are unsecured. Such arrangements will optimize the company’s financing structure. With the expectation that the Fed will increase its rate, the 5-year bonds continue to bear a lower interest rate than in the past, which is a reflection of a stronger confidence in the company’s credit. It will further bring down the company’s financing costs. The bonds issuance has received overwhelming support from investors from various regions around the world on a diversified base, which demonstrates the market’s recognition of CALC’s leading position.

China Everbright Bank, Hong Kong Branch, Citigroup Global Markets and DBS Bank are engaged to act as the joint global coordinators, joint bookrunners and joint lead managers of the bonds issuance. China Everbright Securities is also one of the joint bookrunners and joint lead managers.


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Terry Mulreany
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