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Cathay Pacific launches its first US dollar bond in 25 years

In this picture taken on Aug 10, 2014, a woman walks past check-in counters for Hong Kong flag carrier Cathay Pacific at Hong Kong's international airport. (AFP/DALE DE LA REY)

Hong Kong's Cathay Pacific launched its first US dollar bond in 25 years, a term sheet seen by Reuters showed on Monday (May 10).

The deal will see the issuance of 5.25-year senior unsecured notes with an initial price guidance of a 5.2 percent coupon.

The term sheet showed that potential investors have been told the issue will be of "benchmark size" which indicated it will be at least US$500 million.

Cathay did not immediately respond to a request for comment from Reuters.

The airline will use the proceeds to bolster its working capital levels and fund general corporate purposes, according to the term sheet.

A US dollar bond will be the pandemic-hit carrier's first since 1996 as it primarily has issued its debt in Hong Kong dollars.

Cathay issued HK$6.74 billion (US$869.51 million) of convertible bonds in Hong Kong dollars in January to shore up liquidity, prompting its shares to record their worst daily decline in more than 12 years.

The carrier's shares were up 0.5 percent on Monday morning, in line with the broader market.

Cathay said in March it was focused on preserving cash after posting a record annual loss of HK$21.65 billion, caused by a travel downturn, restructuring costs and fleet writedowns.

Passenger numbers fell by 98.7 percent compared with a year earlier, though cargo carriage was down by a smaller 32.3 percent.

(Source: China Daily)

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