BOC Aviation has issued yuan (CNY) 1 billion ($164 million) of offshore unsecured notes at a coupon of 4.5%.
The deal represents its first offshore yuan-denominated bond, says the lessor. It was issued under the company’s $2 billion Euro Medium Term Note Programme.
The notes, which have been 3.5 times subscribed, will close on 20 November. The deal was jointly arranged by parent BOC International, HSBC and Standard Chartered Bank.
The notes will be rated A- by Fitch Ratings and BBB- by Standard & Poor’s Ratings Services.
The lessor will use the funds for capital expenditure and “general corporate purposes”.
BOC adds that the notes received orders from 60 “high quality fixed income accounts”.
Geographically, the notes were distributed 56% in Hong Kong, 27% in Singapore, 11% in Taiwan and 6% in Europe and others, says BOC. In regard to allocation, 53% will be to private banks and banks, 26% to insurers and sovereign funds, 16% to asset managers and fund managers and 5% to corporate and others.
“We are very pleased to have achieved another milestone, becoming the first global aircraft operating lessor to have issued offshore Chinese [yuan-denominated] notes,” says BOC Aviation managing director and chief executive Robert Martin.
“This further broadens our investor base into a new capital market, and continues with our strategy of diversifying our financing sources.”