CALC working towards international investment grade rating

The China Aircraft Leasing Group (CALC) has reported a total revenue of HK$4,763.7 million ($609.8 million) for the full year 2023, up 14.2% year-on-year. During the year, the group (and its subsidiaries) extended its footprint to the Central Asian, African and Oceania market, with 13 of its new-delivery aircraft leased to overseas airlines with a further six leased to Chinese airlines. These included co-operation with six first-tier airlines in new aircraft leasing for the first time, taking the group’s Chinese-leased aircraft (including Hong Kong, Macau and Taiwan) to 71.5% of its overall portfolio. As of 31 December 2023, CALC’s fleet stood at 192 aircraft (including 165 owned and 27 managed) with narrowbody types representing 90% of the total fleet. As CALC celebrated ‘the 10^th anniversary of its cooperation with the long-term strategic partner Airbus’, the group had a total of 113 Airbus A320neo aircraft on order, making it the 6^th largest lessor for the manufacturer in terms of accumulated orders. During 2023, CALC’s total new financing facilities totalled HK$24bn ($3bn), with cash and cash equivalents as of December 31 amounting to HK$5,300 million ($677 million), up 49.1% year on year. It also launched the first sustainability-linked aircraft PDP syndicated loan in the global aircraft leasing industry with an initial size of $350 million. “We believe that the USD interest rate has reached its peak, and the rate cut cycle is expected to start in 2024, which shall help reduce market capital costs and speed up the recovery of the aircraft trading market,” commented Mike Poon, executive director and CEO of CALC, describing the upcoming market as “accommodative”. Despite being rated as BB+ by Fitch and Ba1 by Moody’s, both with a stable outlook, CALC has set upgrading its international credit rating as a key development target as it looks to move towards achieving an international investment grade rating. “The Group will actively explore market interest in aircraft assets while continuing to capitalize on a strong trading market and further enhance our credit profile through continuous optimization of our financial structure,” concluded Conrad Li, executive director and chief financial officer of CALC.