Hong Kong based-lessor CALC has a diverse funding source base and ample liquidity to deal with the ongoing COVID-19 pandemic, according to a corporate update released by the firm today.
CALC said its strategy has always been to pursue stable and sustainable growth part of which includes developing a diverse funding base, which now includes sources both in China and offshore.
Likewise, according the update, CALC also uses a variety of funding structures including Pre-Delivery Payment (“PDP”) syndicated loans, aircraft project loans, US dollar bonds, Renminbi medium-term notes, corporate bonds to fund its asset-light business model.
To highlight the firm’s financial muscle CALC referenced a March 2020 deal where it secured a RMB1 billion loan in China priced at only 3.65%. CALC now has cash and bank balances totaling HK$3.8 billion and undrawn borrowing facilities of HK$4.3 billion as of March 31.
Additionally CALC says it has been “highly selective” in its airline client base of which 65% is Chinese. The firm's fleet of aircraft stands 139 aircraft as of March 31, the majority of which are state-owned airlines.
“These shield CALC from impacts of disruptions in international traffic given the strong domestic demand. The majority of CALC’s non-Chinese clients are flag-carriers or backed by strong shareholders,” CALC said in its update
CALC said it has also been very selective in identifying aircraft assets, with 92.8% of its fleet being narrow-body aircraft, a liquid asset class it said would be highly sought-after for domestic and regional routes once the market recovers.