Hong Kong’s embattled flag carrier Cathay Pacific welcomed the extension of the HKD 7.8bn ($1bn) bridge loan from the Hong Kong SAR Government on June 8, 2021. The airline, which is dealing with reduced business due to the ongoing pandemic, said that the decision by the Hong Kong government to extend the loan facility by a year to Jun 2022 will provide it more flexibility to manage liquidity. The loan extension is part of a $5bn rescue package by the government and major shareholders Swire Pacific Ltd and Air China decided last year and is vital to the company, which had reported a huge loss of $2.8bn for 2020. The rescue package also includes a HKD 11.7bn ($1.5bn) rights issue to shareholders and a government subscription to its preference shares worth HKD 19.5bn ($2.5bn) as per SCMP. The company had reported a liquidity position of HKD 28bn ($3.6bn) as of December 2020. It had raised $650mn last month through 5.5Y bonds and another HKD 6.74bn ($870mn) from convertible bonds in February to tide over the crisis.
Cathay’s 3.375% 2023s and 2.75% 2026s were up 0.31 and 0.25 respectively to trade at 99.55 and 104.63 on the secondary market.
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