Air China to issue US$250m in bonds

Air China intends to raise US$250 million next week through the sale of short-term bonds, the South China Morning Post reported. The issue of the one-year bonds, available to institutional investors through China's interbank market, comes in response to the airline's disappointing initial public offering. It raised US$577 million, US$288 million short of its target, after reducing the offering by 40% in response to weak demand. The airline is now looking to make up some of the shortfall. Proceeds from the bond sales will be used to strengthen the company's cash flow and operating capital, as well as reduce debt. Insurance companies are expected to be the main buyers of Air China's bonds.