China Eastern Airlines to issue hefty bonds

BEIJING - China Eastern Airlines, the country's second-largest carrier by passenger numbers, said Wednesday that it plans to issue up to 8.8 billion yuan ($1.4 billion) in corporate bonds.

The proceeds will be used to purchase aircraft, replace bank loans, optimize financing and replenish operating capital, the company said in a statement filed to the Shanghai Stock Exchange.

The bonds will have a maturity of up to 10 years, according to the statement.

China Eastern Airlines aims to reduce its debt-to-asset ratio to below 70 percent by the end of 2015 from its current 80.27 percent, Liu Shaoyong, chairman of the company, said Monday at an international industry meeting.

China Eastern Airlines is not the only carrier searching for capital, as many airline companies are determined to increase their fleet size despite the sluggish world economic recovery.

Monday evening, China Southern Airlines, the nation's largest carrier, said it would raise up to 2 billion yuan to repay bank loans.

Shares of China Eastern Airlines rose 1.23 percent to 4.1 yuan as of 10:50 am in Shanghai.