23 February, 2016
Baker & McKenzie's finance and securities teams recently advised China Eastern Airlines Corporation Limited ("CEA"), as the lessee, and CES MU2 LLC, a special purpose trust incorporated in the state of Delaware, as the issuer, on the offerings of USD184,660,000 secured notes due 2026 guaranteed by the Export-Import Bank of the United States ("US Ex-Im Bank"). The proceeds from the offering were used to re-finance certain US Ex-Im loans for the leasing of one new Boeing 777-300ER and one new Boeing 737-800 aircraft. According to HSBC, who was the sole book runner and structuring agent for the transaction, the final coupon rate was the lowest print for EXIM-guaranteed bond of a similar maturity over the last two years.
The Baker & McKenzie team was led by Shanghai-based partner Harvey Lau. He was supported by consultants Yi Ding (finance team) and Shanshan Xu (securities team) in Shanghai.
CEA is an international and domestic airline based in Shanghai, and is one of the three largest air carriers in China. CEA is the first Chinese airline company listed on Shanghai Stock Exchange (stock code: 600115), The Stock Exchange of Hong Kong Limited (stock code: 00670) and New York Stock Exchange (stock code: CEA) in 1997. In 2014, CEA served a route network covering 1,052 domestic and foreign destinations in 177 countries through SkyTeam, an international airlines alliance, and operated primarily from its core hub in Shanghai and regional hubs in Kunming and Xi'an.
Baker & McKenzie has been involved in a number of recent US Ex-Im Bank supported aircraft securitization deals for major airlines. This included advising Air China on their secured notes issuances in 2012 and 2014, and acting as lead counsel for Air China on the very first transaction where a Chinese airline was able to finance an aircraft supported by US Ex-Im Bank without the guarantee from a Chinese bank or a sovereign undertaking from the Chinese government – marking a significant milestone in the PRC's aircraft financing history, and which won recognition from China Business Law Journal as "Banking & Finance Deal of the Year" (2011).
