Hong Kong Airlines defers bond interest payouts of $149mn

Hong Kong Airlines has defaulted for the third time on consecutive semi-annual instalments of interest payments on a US$683m perpetual bond issued in 2017 through Blue Skyview Company, a vehicle belonging to the airline. The three deferrals on the notes mean that the accumulative interest due has now reached around US$149m, local media reported on July 7 citing a disclosure to investors. As a result of the failure to settle, the rate of the interest in July 2020 was raised to 12.125%, and missing the payments in January and July 2021 means that the rate will increase to 15.76%. Hong Kong Airlines reportedly first warned investors that it would default on the payments last July. That implied at the time that it would have to bear a higher interest rate, 12.125% instead of 7.125%. With Blue Skyview’s new announcement to investors that the interest originally scheduled to be paid on July 26 will be deferred again, the total owed, based on the same 15.76% calculation, is about US$149m.<br/>