Air China achieves lowest coupon rate on 777-300ER Ex-Im bond

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Air China, through special purpose company Phoenix 2012, has issued a $141 million bond financing, backed by the US Export Import Bank (Ex-Im), at the lowest coupon rate to date.

The bond carries a coupon of 1.607%, covers a new Boeing 777-300ER delivery, MSN 38673.

The bond priced at mid-swaps, plus 58 basis points, equivalent to Libor plus 23 basis points.

The transaction, in which BNP Paribas is the sole arranger and sole bookrunner was four times oversubscribed.

The aircraft is part of a joint mandate with Citibank. Under the terms of the mandate, BNP Paribas is financing the first aircraft while Citibank with finance, under an Ex-Im bond structure, the second aircraft, which is expected next month.

In June Air China placed its $134.5 million Ex-Im guaranteed bonds for the financing of another 777-300ER through sole arranger and bookrunner HSBC. The wrapped bonds, which had a coupon of 1.972%, were priced at par, or around 75 basis points over swaps. The term is almost 12 years.

Last November Air China tapped the capital markets, through leasing entity Purple Chen 2011, and mandated BNP Paribas to arrange a $135 million Ex-Im guaranteed bond. The French bank was the sole arranger and bookrunner of the 11.75-year financing, 6.28-year average life bond guaranteed by US Ex-Im bank. The transaction priced at 2.735%.