Cathay Pacific plans to repay Hong Kong government over three to five years

Cathay Pacific Airways said it expects to repay the Hong Kong government for HK$19.5b (US$2.52b) of preference shares over a three to five year period. The shares are part of a $5b recapitalisation package announced on Tuesday to help the airline weather the coronavirus crisis. The notes carry a coupon rate of 3% for the first three years, rising to 5% in year four, 7% in year five and 9% in year six, giving the airline an incentive to redeem them. “We would certainly be expecting to repay that over a 3-5 year period,” CFO Martin Murray said in an analyst briefing Tuesday. Murray said the package, which also includes a HK$11.7b rights issue to current shareholders would more than halve the airline’s gearing levels. “That in turn restores access to both the equity and debt market and allows us to tap that market later in the year or next year for equity and debt,” he said.<br/>