Cathay Pacific aims to raise about HK$2 billion in Hong Kong dollar bond, sources say
FILE PHOTO: A Cathay Pacific aircraft takes off at Hong Kong International Airport on the day of the official launch of its third runway, in Hong Kong, China November 28, 2024. REUTERS/Tyrone Siu/File Photo
SYDNEY/HONG KONG, April 21 : Hong Kong carrier Cathay Pacific is aiming to raise about HK$2 billion ($255.41 million) through a one- or two-tranche fixed-rate Hong Kong dollar bond, according to two sources with direct knowledge of the matter.
The airline is planning to issue a three- or five-year fixed-rate Hong Kong dollar bond and possibly both, according to a term sheet seen by Reuters on Tuesday.
A global investor call will take place Tuesday and the bond deal could begin Wednesday, according to the term sheet that did not identify the size of the deal.
The sources could not be named discussing information that had not yet been made public.
Cathay did not immediately respond to a request for comment.
The planned bond issuance comes as global airlines face a tough operating environment in the wake of the Iran war and surging jet fuel prices which are not expected to ease in the short term.
Cathay said earlier this month that it will cut some flights from mid-May until the end of June, citing soaring jet fuel costs triggered by the conflict.
The airline will cancel about 2 per cent of its scheduled passenger flights from May 16 to June 30, while its budget arm HK Express will reduce about 6 per cent from May 11, it said.
The carrier said the suspension of its passenger services to Dubai and Riyadh will stay in place until June 30, and extended its suspension of cargo freighter services to both destinations until end-May. In late February, Cathay had suspended all of its operations in the Middle East.
Iran's closure of the Strait of Hormuz has choked global fuel supplies, forcing airlines to hike fares, cut flights, add refuelling stops and carry extra fuel. Some carriers have cancelled services to and from the Gulf - a key aviation hub linking Europe and Asia - citing safety concerns.
Cathay last week disclosed robust performances on European routes in March as travellers shun disrupted Middle Eastern hubs, even as the airline grappled with a doubling in the price of jet fuel.
($1 = 7.8304 Hong Kong dollars)
