香港交易及结算所有限公司及香港联合交易所有限公司对本公告及随附的上市文件之内容概不

负责，对其准确性或完整性亦不发表任何声明，并明确表示概不对因本公告及随附的上市文件

全部或任何部分内容而产生或因倚赖该等内容而引致之任何损失承担任何责任。

本公告仅供参考之用，并不构成收购、购买或认购任何证券的邀请或要约。

本公告不构成或形成任何要约购买在美国销售的证券的一部分。本公告提及的证券（「证券」）及

证券的担保尚未亦不会根据经不时修订之1933年美国联邦证券法（「证券法」）或美国任何州份或

其他司法管辖区的证券法进行登记，及除非根据证券法的注册要求获得豁免或交易不受注册要

求约束，否则证券不得在美国提供、出售或交付。证券不会在美国公开发售。

本公告及随附的上市文件乃按香港联合交易所有限公司证券上市规则规定仅供参考之用，并不

构成收购、购买或认购任何证券的邀请或要约。本公告及本文所述任何内容（包括随附的上市文

件）并非任何合同或承诺的依据。为免生疑，刊发本公告及随附的上市文件不应被视为就香港法

例第32章公司（清盘及杂项条文）条例而言由发行人（定义见下文）或其代表及担保人（定义见下文）

或其代表刊发的招股章程提出的证券发售要约，亦不属于香港法例第571章证券及期货条例所指

其中载有向公众人士发出邀请以订立或发出要约以订立有关购买、出售、认购或承销证券的协

议的广告、邀请或文件。

香港投资者谨请注意︰发行人和担保人均确认，债券（定义见下文）只供专业投资者（定义见上市

规则第37章）（「专业投资者」）购买，而债券已经在此基础上在香港联合交易所有限公司上市。因此，

发行人和担保人均确认，债券不适合作为香港零售投资者之投资。投资者应审慎考虑所涉及的

风险。

刊发售通函

CALC Bonds Limited

（「发行人」）

（于英属处女群岛注册成立之有限公司）

2028年到期的利率为6.0%之160,000,000美元有担保债券

（股份代号：5865）

（「债券」）

由

CHINA AIRCRAFT LEASING GROUP HOLDINGS LIMITED

中国飞机租赁集团控股有限公司

（「担保人」）

（根据开曼群岛法例注册成立的有限公司）

（股份代号：1848）

提供无条件及不可撤销的担保

本公告乃根据香港联合交易所有限公司（「香港联交所」）证券上市规则（「上市规则」）

第37.39A条刊发。

兹提述于2025年8月14日由发行人刊发的有关债券于香港联交所上市的通知。

请参阅本公告随附的日期为2025年8月11日的与债券相关发售通函（「发售通函」）。

发售通函仅以英文刊发，并无刊发售通函的中文版。诚如发售通函所述，债券

仅供专业投资者购买，并已经按该基准于香港联合交易所上市。

发售通函并不构成向任何司法权区的公众提呈出售任何证券的招股章程、通告、

通函、宣传册或广告，且并非向公众发出邀请以就认购或购买任何证券作出要约，

亦非供传阅以邀请公众就认购或购买任何证券作出要约。

发售通函不得被视为认购或购买发行人任何证券的劝诱，且并无意进行有关劝诱。

投资决定不应仅根据发售通函所载信息而作出。

承董事会命

CALC Bonds Limited

董事

谢芷环

香港，2025年8月15日

于本公告日期，发行人的董事为谢芷环女士及刘伟诚先生。

于本公告日期，担保人的(i)非执行董事为安雪松先生（主席）及潘剑云先生；(i)

执行董事为潘浩文先生（首席执行官）及李国辉先生（首席财务官兼首席策略官）；

及(i)独立非执行董事为卓盛泉先生、范骏华先生，太平绅士及洪雯博士。

附录

日期为2025年8月11日的发售通函

IMPORTANTNOTICE

NOTFORDISTRIBUTIONTOANYPERSONORADRESINTHEUNITEDSTATES.

IMPORTANT:Youmustreadthefolowingdisclaimerbeforecontinuing.Thefolowingdisclaimerapliestotheatached

oferingcircular(the“OferingCircular”).Youareadvisedtoreadthisdisclaimercarefulybeforeacesing,readingormaking

anyotheruseoftheatachedOferingCircular.InacesingtheatachedOferingCircular,youagretobeboundbythe

folowingtermsandconditions,includinganymodificationstothemfromtimetotime,eachtimeyoureceiveanyinformation

fromtheIsuerortheGuarantor(eachasdefinedintheatachedOferingCircular)asaresultofsuchaces.Inordertobe

eligibletoviewtheatachedOferingCircularormakeaninvestmentdecisionwithrespectothesecurities,investorsmustbe

outsidetheUnitedStates(asdefinedunderRegulationSundertheUnitedStatesSecuritiesActof1933,asamended(the

“SecuritiesAct”).

Confirmationofyourepresentation:TheatachedOferingCircularisbeingsentoyouatyourequestandbyaceptingthe

e-mailandacesingtheatachedOferingCircular,youshalbedemedtorepresentotheIsuer,theGuarantorandthe

Managers(asdefinedintheatachedOferingCircular)that(1)youandanycustomersyourepresentareoutsidetheUnitedStates

andthathe-mailadresthatyougavetheIsuer,theGuarantorand/ortheManagersandtowhichthise-mailhasben

deliveredisnotlocatedintheUnitedStates,itsteritoriesorposesions,(2)youconsentodeliveryoftheatachedOfering

Circularandanyamendmentsorsuplementstheretobyelectronictransmision,and(3)tothextentyoupurchasethesecurities

describedintheatachedOferingCircular,youwilbedoingsoinanofshoretransactionasdefinedinregulationsunderthe

SecuritiesActincompliancewithRegulationSthereunder.

TheatachedOferingCircularhasbenmadeavailabletoyouinelectronicform.Youareremindedthatdocumentstransmited

viathismediumaybealteredorchangeduringtheprocesoftransmisionand,consequently,noneoftheIsuer,the

Guarantor,theManagers,theTruste(asdefinedintheatachedOferingCircular),theAgents(asdefinedintheatached

OferingCircular)oranyoftheirespectiveafiliates,directors,oficers,employes,representatives,agents,advisersorany

personwhocontrolsanyofthemaceptsanyliabilityoresponsibilitywhatsoeverinrespectofanydiscrepanciesbetwenthe

documentdistributedtoyouinelectronicformatandthehardcopyversionavailabletoyouponrequestfromtheIsuer,the

Guarantorand/ortheManagers.

Restrictions:TheatachedOferingCircularisbeingfurnishedinconectionwithanoferinginofshoretransactionsoutsidethe

UnitedStatesincompliancewithRegulationSundertheSecuritiesActsolelyforthepurposeofenablingaprospectiveinvestor

toconsiderthepurchaseofthesecuritiesdescribedherein.

THESECURITIESHAVENOTBEN,ANDWILNOTBE,REGISTEREDUNDERTHESECURITIESACTORTHE

SECURITIESLAWSOFANYSTATEOFTHEUNITEDSTATESOROTHERJURISDICTIONANDTHESECURITIES

MAYNOTBEOFEREDORSOLDWITHINTHEUNITEDSTATES,EXCEPTPURSUANTOANEXEMPTION

FROM,ORINATRANSACTIONOTSUBJECTO,THEREGISTRATIONREQUIREMENTSOFTHESECURITIES

ACTANDAPLICABLESTATEORLOCALSECURITIESLAWS.THEOFERINGISMADESOLELYOUTSIDETHE

UNITEDSTATESINOFSHORETRANSACTIONSINRELIANCEONREGULATIONSUNDERTHESECURITIES

ACT.

Nothinginthiselectronictransmisionconstitutes,andmaybeusedinconectionwith,anoferoraninvitationbyoronbehalf

oftheIsuer,theGuarantororanyManagertosubscribefororpurchaseanyofthesecuritiesdescribedtherein,inanyplace

whereofersorsolicitationsarenotpermitedbylawandaceshasbenlimitedsothatitshalnotconstituteintheUnitedStates

orelsewhereageneralsolicitationorgeneraladvertising(asthosetermsareusedinRegulationDundertheSecuritiesAct)or

directedselingeforts(withinthemeaningofRegulationSundertheSecuritiesAct).Ifajurisdictionrequiresthatheoferingbe

madebyalicensedbrokerordealerandanyoftheManagersoranyafiliateoftheManagersisalicensedbrokerordealerinthat

jurisdiction,theoferingshalbedemedtobemadebysuchManagerorsuchafiliateonbehalfoftheIsuerandtheGuarantor

insuchjurisdiction.TheatachedOferingCircularanditscontentsareconfidentialandshouldnotbedistributed,publishedor

reproduced(inwholeorinpart)ordisclosedbyrecipientstoanyotherperson.Youareremindedthatyouhaveacesedthe

atachedOferingCircularonthebasisthatyouareapersonintowhoseposesiontheatachedOferingCircularmaybelawfuly

deliveredinacordancewiththelawsofthejurisdictioninwhichyouarelocatedandyoumaynot,norareyouauthorisedto,

delivertheatachedOferingCircular,electronicalyorotherwise,toanyotherperson.Ifyouhavegainedacestothis

transmisioncontrarytotheforegoingrestrictions,youarenotalowedandwilnotbeabletopurchaseanyofthesecurities

describedintheatachedOferingCircular.

Actionsthatyoumaynotake:Ifyoureceivethisdocumentbye-mail,youshouldnotreplybye-mailtothisdocument,andyou

maynotpurchaseanysecuritiesbydoingso.Anyreplye-mailcomunications,includingthoseyougeneratebyusingthe

“Reply”functiononyoure-mailsoftware,wilbeignoredorejected.

YOUARENOTAUTHORISEDTOANDYOUMAYNOTFORWARDORDELIVERTHEATACHEDOFERING

CIRCULAR,ELECTRONICALYOROTHERWISE,TOANYOTHERPERSONOREPRODUCESUCHOFERING

CIRCULARINANYMANERWHATSOEVER.ANYFORWARDING,DISTRIBUTIONOREPRODUCTIONOFTHE

ATACHEDOFERINGCIRCULARINWHOLEORINPARTISUNAUTHORISED.FAILURETOCOMPLYWITH

THISDIRECTIVEMAYRESULTINAVIOLATIONOFTHESECURITIESACTORTHEAPLICABLELAWSOF

OTHERJURISDICTIONS.

Youareresponsibleforprotectingagainstvirusesandotherdestructiveitems.IfyoureceivetheatachedOferingCircular

bye-mail,youruseofthise-mailisatyourownriskanditisyouresponsibilitytotakeprecautionstoensurethatitisfrefrom

virusesandotheritemsofadestructivenature.

CALCBONDSLimited

(the“Isuer”)

(incorporatedintheBritishVirginIslandswithlimitedliability)

U.S.$160,000,0006.0PERCENT.GUARANTEDBONDSDUE2028

unconditionalyandirevocablyguarantedby

CHINAIRCRAFTLEASINGROUPHOLDINGSLIMITED

(the“Guarantor”)

(incorporatedintheCaymanIslandswithlimitedliability)

ISUEPRICEFORTHEBONDS:100.0PERCENT.

TheU.S.$160,000,0006.0percent.guarantedbondsdue2028(the“Bonds”)wilbeisuedbyCALCBondsLimited(the“Isuer”).TheBonds

wilbeunconditionalyandirevocablyguaranted(the“Guarante”)byChinaAircraftLeasingGroupHoldingsLimited(the“Guarantor”).

TheBondswilbearinterestontheiroutstandingprincipalamountfromandincluding14August2025(the“IsueDate”)atherateof6.0percent.

peranum.InterestontheBondsispayablesemi-anualyinarearinequalinstalmentsofU.S.$30.0perCalculationAmount(asdefinedinthe

TermsandConditionsoftheBonds(asdefinedbelow)on14Februaryand14Augustineachyear,comencingon14February2026.

TheBondswilconstitutedirect,unsubordinated,unconditionaland(subjectoCondition4ofthetermsandconditionsoftheBonds(the“Terms

andConditionsoftheBonds”)unsecuredobligationsoftheIsuerandshalataltimesrank,paripasuandwithoutanypreferenceamong

themselves.ThepaymentobligationsoftheIsuerundertheBondshal,saveforsuchexceptionsasmaybeprovidedbyaplicablelawandsubject

toCondition4(a)oftheTermsandConditionsoftheBonds,ataltimesrankatleastequalywithalitsotherpresentandfutureunsecuredand

unsubordinatedobligations.PaymentsontheBondswilbemadewithoutdeductionfororonacountoftaxesoftheBritishVirginIslands,the

CaymanIslands,HongKongorthePRCor,ineachcase,anyauthoritythereinorthereofhavingpowertotaxtothextentdescribedin“Termsand

ConditionsoftheBonds–Taxation”.

TheobligationsoftheGuarantorundertheGuaranteshal,saveforsuchexceptionsasmaybeprovidedbyaplicablelawandsubjectoCondition

4(a)oftheTermsandConditionsoftheBonds,ataltimesrankatleastequalywithalitsotherpresentandfutureunsecuredandunsubordinated

obligations.

Unlespreviouslyredemed,orpurchasedandcanceled,theBondswilberedemedatheirprincipalamounton14August2028.TheBondsmay

beredemedatheoptionoftheIsuerinwhole,butnotinpart,atheirprincipalamountogetherwithinterestacruedtothedatefixedfor

redemptionupontheocurenceofcertaintaxevents.TheBondsmayalsoberedemedatheoptionoftheBondholders(asdefinedintheTerms

andConditionsoftheBonds)at101percent.oftheprincipalamount(togetherwithacruedinterestobutexcludingthedateofredemption),upon

theocurenceofaChangeofControl(asdefinedintheTermsandConditionsoftheBonds).

ForamoredetailedescriptionoftheBonds,se“TermsandConditions”beginingonpage51.

TheGuarantoreceivedacorporateratingofaninvestment-gradeinternationalratingof“Ag-”withastableoutlokfromChinaChengxin(Asia

Pacific)CreditRatingsCompanyLimited(“ChinaChengxin”).TheBondsandtheGuarantehavenotbenrated.Aratingisnotarecomendation

tobuy,selorholdsecuritiesandmaybesubjectorevision,qualification,suspension,reductionorwithdrawalatanytimebytheasigningrating

agency.Asuspension,reductionorwithdrawaloftheratingasignedtotheGuarantormayadverselyafecthemarketpriceoftheBonds.

TheBondswilbeisuedinthespecifiedenominationofU.S.$200,000andintegralmultiplesofU.S.$1,000inexcesthereof.

InvestingintheBondsinvolvesrisks.Se“RiskFactors”beginingonpage20foradiscusionofcertainriskfactorstobeconsideredinconection

withaninvestmentintheBonds.

TheBondsandtheGuarantehavenotbenandwilnotberegisteredundertheU.S.SecuritiesActof1933,asamended(the“SecuritiesAct”)and

maynotbeoferedorsoldwithintheUnitedStatesexceptpursuantoanexemptionfrom,orinatransactionotsubjecto,theregistration

requirementsoftheSecuritiesAct.ForadescriptionoftheseandcertainrestrictionsonofersandsalesoftheBondsandtheGuaranteandthe

distributionofthisOferingCircular,se“SubscriptionandSale”.

AplicationwilbemadetoTheStockExchangeofHongKongLimited(the“HongKongStockExchange”)forthelistingof,andpermisionto

dealin,theBondsbywayofdebtisuestoprofesionalinvestors(asdefinedinChapter37oftheRulesGoverningtheListingofSecuritiesonThe

StockExchangeofHongKongLimited)(“ProfesionalInvestors”)only.ThisdocumentisfordistributiontoProfesionalInvestorsonly.

NoticetoHongKonginvestors:EachoftheIsuerandtheGuarantorconfirmsthatheBondsareintendedforpurchasebyProfesional

InvestorsonlyandwilbelistedontheHongKongStockExchangeonthatbasis.Acordingly,eachoftheIsuerandtheGuarantorconfirms

thatheBondsarenotapropriateasaninvestmentforetailinvestorsinHongKong.Investorshouldcarefulyconsidertherisksinvolved.

TheHongKongStockExchangehasnotreviewedthecontentsofthisdocument,otherthantoensurethatheprescribedformdisclaimer

andresponsibilitystatements,andastatementlimitingdistributionofthisdocumentoProfesionalInvestorsonlyhavebenreproducedin

thisdocument.ListingoftheBondsontheHongKongStockExchangeisnotobetakenasanindicationofthecomercialmeritsorcredit

qualityoftheBondsortheIsuerorGuarantorortheGrouporqualityofdisclosureinthisdocument.HongKongExchangesandClearing

LimitedandtheHongKongStockExchangetakenoresponsibilityforthecontentsofthisdocument,makenorepresentationastoitsacuracyor

completenesandexpreslydisclaimanyliabilitywhatsoeverforanyloshowsoeverarisingfromorinrelianceuponthewholeoranypartofthe

contentsofthisdocument.

TheBondswilberepresentedinitialybybeneficialinterestsinaglobalcertificate(the“GlobalCertificate”)inregisteredformwhichwilbe

registeredinthenameofanomineof,andshalbedepositedonoraboutheIsueDatewith,acomondepositaryforEuroclearBankSA/NV

(“Euroclear”)andClearstreamBankingS.A.(“Clearstream”).BeneficialinterestsintheGlobalCertificatewilbeshownon,andtransfersthereof

wilbefectedonlythrough,recordsmaintainedbyEuroclearandClearstream.ExceptasdescribedintheGlobalCertificate,certificatesforthe

BondswilnotbeisuedinexchangeforinterestsintheGlobalCertificate.

JointGlobalCordinators,JointBokrunersandJointLeadManagers

ChinaCITICBankInternationalBNPARIBAS

JointBokrunersandJointLeadManagers

ChinaZheshangBankCo.,Ltd.

(HongKongBranch)

IndustrialBankCo.,Ltd.

HongKongBranch

CMBCapitalCITICSecuritiesChinaIndustrialSecurities

International

JointLeadManager

GuoyuanSecurities

(HongKong)

GuotaiJunan

International

ChinaInternational

CapitalCorporation

ChinaSecurities

International

ICBCInternationalCNCBCapital

ThisOferingCirculardated11August2025

NOTICETOINVESTORS

THISOFERINGCIRCULARDOESNOTCONSTITUTEANOFERTOSEL,ORA

SOLICITATIONOFANOFERTOBUY,ANYSECURITIESINANYJURISDICTIONTOANY

PERSONTOWHOMITISUNLAWFULTOMAKETHEOFERORSOLICITATIONINSUCH

JURISDICTION.NEITHERTHEDELIVERYOFTHISOFERINGCIRCULARNORANYSALE

MADEHEREUNDERSHALUNDERANYCIRCUMSTANCESIMPLYTHATHEREHASBEN

NOCHANGEINTHEAFAIRSOFTHEISUER,THEGUARANTORORANYOFTHEIR

RESPECTIVESUBSIDIARIESORTHATHEINFORMATIONSETFORTHINTHISOFERING

CIRCULARISCORECTASATANYDATESUBSEQUENTOTHEDATEHEREOF.

ThisOferingCircularincludesparticularsgivenincompliancewiththeRulesGoverningtheListingof

SecuritiesonTheStockExchangeofHongKongLimitedforthepurposeofgivinginformationwith

regardtotheIsuer,theGuarantorandtheGroup.EachoftheIsuerandtheGuarantoraceptsful

responsibilityfortheacuracyoftheinformationcontainedinthisOferingCircularandconfirms,

havingmadealreasonablenquiries,thatothebestofitsknowledgeandbelieftherearenotherfacts

theomisionofwhichwouldmakeanystatementhereinmisleading.

HongKongExchangesandClearingLimitedandtheHongKongStockExchangetakenoresponsibility

forthecontentsofthisOferingCircular,makenorepresentationastoitsacuracyorcompletenesand

expreslydisclaimanyliabilitywhatsoeverforanyloshowsoeverarisingfromorinrelianceuponthe

wholeoranypartofthecontentsofthisOferingCircular.

EachoftheIsuerandtheGuarantorconfirmsthat(i)thisOferingCircularcontainsalinformation

withrespectotheIsuer,theGuarantorandtheGuarantor’subsidiaries(colectively,the“Group”),

theBondsandtheGuarantewhichismaterialinthecontextoftheisueandoferingoftheBonds

(includingalinformationrequiredbyaplicablelawsandtheinformationwhich,acordingtothe

particularnatureoftheIsuer,theGuarantor,theGuaranteandtheBonds,isnecesarytoenable

investorsandtheirinvestmentadviserstomakeaninformedasesmentoftheasetsandliabilities,

financialposition,profitsandlosesandprospectsoftheIsuer,theGuarantorandtheGroupandthe

rightsatachingtotheGuaranteandtheBonds);(i)thestatementscontainedinthisOferingCircular

areinalmaterialrespectstrueandacurateandnotmisleadingandtherearenotherfactsinrelation

totheIsuer,theGuarantor,theGroup,theGuaranteortheBondstheomisionofwhichwouldinthe

contextoftheisueandoferingoftheBondsmakeanystatementinthisOferingCircularmisleading

inanymaterialrespect;(i)theopinionsandintentionsexpresedinthisOferingCircularwithregard

totheIsuer,theGuarantorandtheGrouparehonestlyheld,havebenreachedafterconsideringal

relevantcircumstancesandarebasedonreasonableasumptions;(iv)alreasonablenquirieshaveben

madebytheIsuerandtheGuarantortoascertainsuchfactsandtoverifytheacuracyofalsuch

informationandstatementsinthisOferingCircular;and(v)thisOferingCirculardoesnotincludean

untruestatementofamaterialfactoromitostateamaterialfactnecesaryinordertomakethe

statementsherein,inthelightofthecircumstancesunderwhichtheyweremade,notmisleading.

ThisOferingCircularhasbenpreparedbytheIsuerandtheGuarantorsolelyforuseinconection

withtheproposedoferingoftheBondsdescribedinthisOferingCircular.Thedistributionofthis

OferingCircularandtheoferingoftheBondsincertainjurisdictionsmayberestrictedbylaw.

PersonsintowhoseposesionthisOferingCircularcomesarerequiredbytheIsuer,theGuarantor,

ChinaCITICBankInternationalLimited,BNPARIBAS,ChinaZheshangBankCo.,Ltd.(HongKong

Branch),IndustrialBankCo.,Ltd.HongKongBranch,CMBCSecuritiesCompanyLimited,CLSA

Limited,ChinaIndustrialSecuritiesInternationalBrokerageLimited,GuoyuanSecuritiesBrokerage

(HongKong)Limited,GuotaiJunanSecurities(HongKong)Limited,ChinaInternationalCapital

CorporationHongKongSecuritiesLimited,ChinaSecurities(International)CorporateFinance

CompanyLimited,ICBCInternationalSecuritiesLimitedandCNCB(HongKong)CapitalLimited(the

“Managers”)toinformthemselvesaboutandtobserveanysuchrestrictions.NoneoftheIsuer,the

Guarantor,anyoftheManagers,theTruste,theAgentsoranyoftheirespectiveafiliates,directors,

employes,agents,representatives,oficersoradvisersoranypersonwhocontrolsanyofthem

representsthathisOferingCircularmaybelawfulydistributed,orthatheBondsmaybelawfuly

ofered,incompliancewithanyaplicableregistrationorotherequirementsinanysuchjurisdiction,or

pursuantoanexemptionavailablethereunder,orasumeanyresponsibilityforfacilitatinganysuch

distributionorofering.NoactionisbeingtakentopermitapublicoferingoftheBondsorthe

distributionofthisOferingCircularinanyjurisdictionwhereactionwouldberequiredforsuch

purposes.TherearerestrictionsontheoferandsaleoftheBondsandthecirculationofdocuments

relatingthereto,incertainjurisdictionsincludingtheUnitedStates,theUnitedKingdom,thePRC,

HongKong,Singapore,Japan,CaymanIslands,andtheBritishVirginIslands,andtopersonsconected

therewith.Foradescriptionofcertainfurtherestrictionsonofers,salesandresalesoftheBondsand

distributionofthisOferingCircular,se“SubscriptionandSale”.BypurchasingtheBonds,investors

representandagretoalofthoseprovisionscontainedinthatsectionofthisOferingCircular.This

OferingCircularispersonaltoeachofereandoesnotconstituteanofertoanyotherpersonorto

thepublicgeneralytosubscribefor,orotherwiseacquire,theBonds.DistributionofthisOfering

Circulartoanyotherpersonotherthantheprospectiveinvestorandanypersonretainedtoadvisesuch

prospectiveinvestorwithrespectoitspurchaseisunauthorised.Eachprospectiveinvestor,by

aceptingdeliveryofthisOferingCircular,agrestotheforegoingandtomakenophotocopiesofthis

OferingCircularoranydocumentsreferedtothisOferingCircular.

Nopersonhasbenorisauthorisedtogiveanyinformationortomakeanyrepresentationconcerning

theIsuer,theGuarantor,theGroup,theBonds,theGuaranteotherthanascontainedhereinand,if

givenormade,anysuchotherinformationorepresentationshouldnotberelieduponashavingben

authorisedbytheIsuer,theGuarantor,theManagers,theTrusteortheAgents(asdefinedinTerms

andConditionsoftheBonds)ortheirespectiveafiliates,directors,oficers,employes,agents,

representatives,advisersoranypersonwhocontrolsanyofthem.NeitherthedeliveryofthisOfering

Circularnoranyofering,saleordeliverymadeinconectionwiththeisueoftheBondshal,under

anycircumstances,constitutearepresentationthatherehasbenochangeordevelopmentreasonably

likelytoinvolveachangeintheafairsoftheIsuer,theGuarantorortheGroupsincethedatehereofor

createanyimplicationthatheinformationcontainedhereiniscorectasatanydatesubsequentothe

datehereof.ThisOferingCirculardoesnotconstituteanoferof,oraninvitationbyoronbehalfofthe

Isuer,theGuarantor,theManagers,theTrusteortheAgentsoranyoftheirespectiveafiliates,

directors,oficers,employes,agents,representatives,advisersoranypersonwhocontrolsanyofthem

tosubscribefororpurchasetheBondsandmaynotbeusedforthepurposeofanoferto,ora

solicitationby,anyoneinanyjurisdictionorinanycircumstancesinwhichsuchoferorsolicitationis

notauthorisedorisunlawful.

ThisOferingCircularmaynotbecopiedoreproducedinwholeorinpart.Itmaybedistributedonly

toanditscontentsmaybedisclosedonlytotheprospectiveinvestorstowhomitisprovided.By

aceptingdeliveryofthisOferingCirculareachinvestoragrestotheserestrictions.

Norepresentationorwaranty,expresorimplied,ismadeorgivenbytheManagers,theTrusteorthe

Agents(oranyoftheirespectiveafiliates,directors,oficers,employes,representatives,agents,

advisersoranypersonwhocontrolsanyofthem)astotheacuracy,completenesorsuficiencyofthe

informationcontainedinthisOferingCircular,andnothingcontainedinthisOferingCircularis,or

shalberelieduponas,apromise,representationorwarantybytheManagers,theTrusteorthe

Agents(oranyoftheirespectiveafiliates,directors,oficers,employes,representatives,agents,

advisersoranypersonwhocontrolsanyofthem).NoneoftheManagers,theTrusteandtheAgents(or

anyoftheirespectiveafiliates,directors,oficers,employes,representatives,agents,advisersand

anypersonwhocontrolsanyofthem)hasindependentlyverifiedanyoftheinformationcontainedin

thisOferingCircularandcangiveasurancethatsuchinformationisacurate,truthfulorcomplete.

EachpersonreceivingthisOferingCircularacknowledgesthatithasnotreliedontheManagers,the

TrusteortheAgentsoranyoftheirespectiveafiliates,oficers,employes,agents,representatives,

directorsoradvisersoranypersonwhocontrolsanyoftheminconectionwithitsinvestigationofthe

acuracyofsuchinformationoritsinvestmentdecision,andsuchpersonmustrelyonitsown

examinationoftheIsuer,theGuarantor,theGroup,andthemeritsandrisksinvolvedininvestinginthe

Bonds.Se“RiskFactors”belowforadiscusionofcertainfactorstobeconsideredinconectionwith

aninvestmentintheBonds.

Tothefulestextentpermitedbylaw,theManagers,theTrusteandtheAgents(andanyoftheir

respectiveafiliates,directors,oficers,employes,representatives,agents,advisersandeachperson

whocontrolsanyofthem)donotaceptanyresponsibilityforthecontentsofthisOferingCircularand

asumenoresponsibilityforthecontents,acuracy,completenesorsuficiencyofanysuch

informationorforanyotherstatement,madeorpurportedtobemadebytheManagers,theTrusteor

theAgentsoranyoftheirespectiveafiliates,directors,oficers,employes,representatives,agents,

advisersoranypersonwhocontrolsanyofthem,orontheirbehalfinconectionwiththeIsuerorthe

isueandoferingoftheBonds.EachoftheManagers,theTrusteandtheAgents(andtheirespective

afiliates,directors,oficers,employes,representatives,agents,advisersandeachpersonwhocontrols

anyofthem)acordinglydisclaimsalandanyliabilitywhetherarisingintortorcontractorotherwise

whichitmightotherwisehaveinrespectofthisOferingCircularoranysuchstatement.Noneofthe

Managers,theTrusteandtheAgents(andanyoftheirespectiveafiliates,directors,oficers,

employes,representatives,agents,advisersandeachpersonwhocontrolsanyofthem)undertakesto

reviewthefinancialconditionorafairsoftheIsuer,theGuarantorortheGroupduringthelifeofthe

arangementscontemplatedbythisOferingCircularnortoadviseanyinvestororpotentialinvestorsin

theBondsofanyinformationcomingtotheatentionoftheManagers,theTrusteoranyAgentortheir

respectiveafiliates,directors,oficers,employes,representatives,agents,advisersoranypersonwho

controlsanyofthem.

ThisOferingCircularisnotintendedtoprovidethebasisofanycreditorotherevaluationorshouldit

beconsideredasarecomendationbyanyoftheIsuer,theGuarantor,theManagers,theTrusteorthe

Agents(oranyoftheirespectiveafiliates,directors,oficers,employes,representatives,agents,

advisersoranypersonwhocontrolsanyofthem)thatanyrecipientofthisOferingCircularshould

subscribefororpurchasetheBonds.ProspectiveinvestorshouldnotconstrueanythinginthisOfering

Circularaslegal,businesortaxadvice.Eachprospectiveinvestorshouldetermineforitselfthe

relevanceoftheinformationcontainedinthisOferingCircularandconsultitsowntax,legaland

businesadvisersnededtomakeitsinvestmentdecisionandeterminewhetheritislegalyableto

purchasetheBondsunderaplicablelawsoregulations.

INCONECTIONWITHTHISOFERING,ANYOFTHEMANAGERSAPOINTEDOR

ACTINGASTABILISATIONMANAGER(EXCEPTCHINACITICBANKINTERNATIONAL

LIMITEDWHOSHALNOTACTASASTABILISATIONMANAGER)(THE“STABILISATION

MANAGER”)ORANYPERSON(S)ACTINGONBEHALFOFTHESTABILISATION

MANAGERMAY,TOTHEXTENTPERMITEDBYAPLICABLELAWSAND

DIRECTIVES,OVER-ALOTOREFECTRANSACTIONSWITHAVIEWTOSUPORTING

THEMARKETPRICE(S)OFASERIESOFTHEBONDSATALEVELHIGHERTHANTHAT

WHICHMIGHTOTHERWISEPREVAIL.HOWEVER,THEREISNOBLIGATIONONTHE

STABILISATIONMANAGER(ORPERSON(S)ACTINGONBEHALFOFTHE

STABILISATIONMANAGER)TODOTHIS.ANYSTABILISATIONACTIONMAYBEGINON

ORAFTERTHEDATEONWHICHADEQUATEPUBLICDISCLOSUREOFTHETERMSOF

THEOFEROFTHEBONDSISMADEAND,IFBEGUN,MAYBENDEDATANYTIME,

BUTITMUSTENDNOLATERTHANTHEARLIEROF30DAYSAFTERTHEISUEDATE

OFTHEBONDSAND60DAYSAFTERTHEDATEOFALOTMENTOFTHEBONDS.SUCH

STABILISATIONSHALBEINCOMPLIANCEWITHALAPLICABLELAWS,

REGULATIONSANDRULES.

TheBondsandtheGuarantehavenotbenandwilnotberegisteredwiththeUnitedStates

SecuritiesandExchangeComisionundertheSecuritiesActorwithanystatesecurities

comisionintheUnitedStatesoranyotherUnitedStatesregulatoryauthority,norhaveanyof

theforegoingauthoritiespaseduponorendorsedthemeritsoftheoferingortheacuracyor

adequacyofthisOferingCircular.Anyrepresentationtothecontraryisacriminalofenseinthe

UnitedStates.

AnyoftheManagersandtheirespectiveafiliatesmaypurchasetheBondsforitsortheirownacount

andenterintotransactions,includingcreditderivatives,suchasasetswaps,repackagingandcredit

defaultswapsrelatingtotheBondsand/orothersecuritiesoftheIsuer,theGuarantorortheir

respectivesubsidiariesorasociatesathesametimeastheoferandsaleoftheBondsorinsecondary

marketransactions.Suchtransactionsmaybecariedoutasbilateraltradeswithselected

counterpartiesandseparatelyfromanyexistingsaleoresaleoftheBondstowhichthisOfering

Circularelates(notwithstandingthatsuchselectedcounterpartiesmayalsobepurchasersofthe

Bonds).Furthermore,investorsintheBondsmayincludentitiesafiliatedwiththeGroup.

Inmakinganinvestmentdecision,investorsmustrelyontheirownexaminationoftheIsuer,the

GuarantorandtheGroupandthetermsoftheoferingoftheBonds,includingthemeritsandrisks

involved.Se“RiskFactors”foradiscusionofcertainfactorstobeconsideredinconectionwithan

investmentintheBonds.InvestorsareadvisedtoreadandunderstandthecontentsofthisOfering

Circularbeforeinvestingandconsultheiratorneyandadviserifindoubt.

ListingoftheBondsontheHongKongStockExchangeisnotobetakenasanindicationofthemerits

oftheIsuer,theGuarantor,theGrouportheBonds.TheIsuer,theGuarantor,theGroup,the

Managers,theTruste,theAgentsandtheirespectivedirectors,oficers,employes,representatives,

advisers,agents,afiliatesandeachpersonwhocontrolsanyofthemarenotmakinganyrepresentation

toanypurchaserofBondsregardingthelegalityofanyinvestmentintheBondsbysuchpurchaser

underanylegalinvestmentorsimilarlawsoregulations.ThecontentsofthisOferingCircularshould

notbeconstruedasprovidinglegal,busines,acountingorinvestmentadvice.Eachpersonreceiving

thisOferingCircularacknowledgesthatsuchpersonhasnotreliedontheManagers,theTruste,the

Agentsoranyoftheirespectivedirectors,oficers,employes,representatives,agents,advisers,

afiliatesoranypersonwhocontrolsanyoftheminconectionwithitsinvestigationoftheacuracyof

suchinformationoritsinvestmentdecision.

Noticetocapitalmarketintermediariesandprospectiveinvestorspursuantoparagraph21ofthe

HongKongSFCodeofConduct–ImportantNoticetoProspectiveInvestors

Prospectiveinvestorshouldbeawarethatcertainintermediariesinthecontextofthisoferingofthe

Bonds,includingcertainManagers,are“capitalmarketintermediaries”(the“CMIs”)subjecto

Paragraph21oftheCodeofConductforPersonsLicensedbyorRegisteredwiththeSecuritiesand

FuturesComision(the“SFCode”).Thisnoticetoprospectiveinvestorsisasumaryofcertain

obligationstheSFCodeimposesonsuchCMIs,whichrequiretheatentionandcoperationof

prospectiveinvestors.CertainCMIsmayalsobeactingas“overalcordinators”(the“OCs”)forthis

oferingandaresubjectoaditionalrequirementsundertheSFCode.

Prospectiveinvestorswhoarethedirectors,employesormajorshareholdersoftheIsuer,the

Guarantor,aCMIoritsgroupcompanieswouldbeconsideredundertheSFCodeashavingan

asociation(an“Asociation”)withtheIsuer,theGuarantor,theCMIortherelevantgroupcompany.

ProspectiveinvestorsasociatedwiththeIsuer,theGuarantororanyCMI(includingitsgroup

companies)shouldspecificalydisclosethiswhenplacinganorderfortheBondsandshouldisclose,at

thesametime,ifsuchordersmaynegativelyimpacthepricediscoveryprocesinrelationtothis

ofering.ProspectiveinvestorswhodonotdisclosetheirAsociationsareherebydemednotobeso

asociated.WhereprospectiveinvestorsdisclosetheirAsociationsbutdonotdisclosethatsuchorder

maynegativelyimpacthepricediscoveryprocesinrelationtothisofering,suchorderishereby

demednotonegativelyimpacthepricediscoveryprocesinrelationtothisofering.

Prospectiveinvestorshouldensure,andbyplacinganorderprospectiveinvestorsaredemedto

confirm,thatordersplacedarebonafide,arenotinflatedandonotconstituteduplicatedorders(i.e.

twormorecorespondingoridenticalordersplacedviatwormoreCMIs).Ifaprospectiveinvestoris

anasetmanagementarmafiliatedwithanyManager,suchprospectiveinvestorshouldindicatewhen

placinganorderifitisforafundorportfoliowheretheManageroritsgroupcompanyhasmorethan

50percent.interest,inwhichcaseitwilbeclasifiedasa“proprietaryorder”andsubjecto

apropriatehandlingbyCMIsinacordancewiththeSFCodeandshouldisclose,athesametime,

ifsuch“proprietaryorder”maynegativelyimpacthepricediscoveryprocesinrelationtothis

ofering.Prospectiveinvestorswhodonotindicatethisinformationwhenplacinganorderarehereby

demedtoconfirmthatheirorderisnota“proprietaryorder”.Ifaprospectiveinvestorisotherwise

afiliatedwithanyManager,suchthatitsordermaybeconsideredtobea“proprietaryorder”(pursuant

totheSFCode),suchprospectiveinvestorshouldindicatetotherelevantManagerwhenplacingsuch

order.Prospectiveinvestorswhodonotindicatethisinformationwhenplacinganorderarehereby

demedtoconfirmthatheirorderisnota“proprietaryorder”.Whereprospectiveinvestorsdisclose

suchinformationbutdonotdisclosethatsuch“proprietaryorder”maynegativelyimpactheprice

discoveryprocesinrelationtothisofering,such“proprietaryorder”isherebydemednoto

negativelyimpacthepricediscoveryprocesinrelationtothisofering.

ProspectiveinvestorshouldbeawarethatcertaininformationmaybedisclosedbyCMIs(including

privatebanks)whichispersonaland/orconfidentialinaturetotheprospectiveinvestor.Byplacingan

order,prospectiveinvestorsaredemedtohaveunderstodandconsentedtothecolection,disclosure,

useandtransferofsuchinformationbytheManagersand/oranyotherthirdpartiesasmayberequired

bytheSFCode,includingtotheIsuer,theGuarantor,anyOCs,relevantregulatorsand/oranyother

thirdpartiesasmayberequiredbytheSFCode,itbeingunderstodandagredthatsuchinformation

shalonlybeusedforthepurposeofcomplyingwiththeSFCode,duringthebokbuildingprocesfor

thisofering.Failuretoprovidesuchinformationmayresultinthatorderbeingrejected.

INDUSTRYANDMARKETDATA

MarketdatandcertainindustryforecastsandstatisticsinthisOferingCircularhavebenobtained

frombothpublicandprivatesources,includinginternalsurveysandmaterials,marketresearch,

publiclyavailableinformation,variousgovernmentsourcesandindustrypublications.Althoughthis

informationisbelievedbytheIsuerandtheGuarantortobereliable,ithasnotbenindependently

verifiedbytheIsuer,theGuarantor,theManagers,theTruste,theAgentsortheirespectivedirectors,

oficers,employes,representatives,advisers,agents,afiliatesoranypersonwhocontrolsanyofthem,

andnoneoftheIsuer,theGuarantor,theManagers,theTruste,theAgentsortheirespective

directors,oficers,employes,representatives,advisers,agents,afiliatesoranypersonwhocontrols

anyofthemakesanyrepresentationastothecorectnes,acuracyorcompletenesofthat

information.Suchinformationmaynotbeconsistentwithotherinformationcompiledwithinoroutside

thePRC.Inadition,thirdpartyinformationprovidersmayhaveobtainedinformationfromarket

participantsandsuchinformationmaynothavebenindependentlyverified.Acordingly,such

informationshouldnotbeundulyreliedupon.ThisOferingCircularsumarisescertaindocuments

andotherinformation,andinvestorshouldrefertothemforamorecompleteunderstandingofwhatis

discusedinthosedocuments.

PRESENTATIONOFINANCIALINFORMATION

TheconsolidatedfinancialinformationoftheGuarantorasatandfortheyearsended31December

2022,2023and2024includedinthisOferingCircularhasbenextractedfromtheGuarantor’saudited

consolidatedfinancialstatementsasatandfortheyearsended31December2023(the“2023Audited

ConsolidatedFinancialStatements”)and2024(the“2024AuditedConsolidatedFinancial

Statements”,togetherwiththe2023AuditedConsolidatedFinancialStatements,the“Audited

ConsolidatedFinancialStatements”),whichareincludedelsewhereinthisOferingCircular.The

2023AuditedConsolidatedFinancialStatementswereauditedbyPricewaterhouseCopers(“PwC”)and

the2024AuditedConsolidatedFinancialStatementswereauditedbyDeloiteToucheTohmatsu

(“Deloite”),eachtheindependentauditoroftheGuarantorforthefinancialyearsended31December

2023and2024respectively.TheAuditedConsolidatedFinancialStatementswerepreparedand

presentedinacordancewithHongKongFinancialReportingStandards(“HKFRS”).

Unlesotherwisestated,alfinancialdatacontainedhereinwhichistatedasrelatingtotheGuarantor

arereferingtotheconsolidatedfinancialinformationoftheGuarantor.

EXCHANGERATEINFORMATION

ThisOferingCircularcontainsatranslationofcertainRenminbiamountsandHongKongdolar

amountsintoU.S.dolarsatspecifiedratesolelyfortheconvenienceofthereader.Unlespecifiedin

theanualorinterimfinancialstatementsoftheGuarantororotherwisespecified,wherefinancial

informationinrelationtotheIsuerortheGuarantorhasbentranslatedintoU.S.dolars,ithasbenso

translated,forconvenienceonly,atherateofRMB7.2993perU.S.$1.00,thenonbuyingrateaset

forthintheH.10weklystatisticalreleaseoftheBoardofGovernorsoftheFederalReserveSystemof

theUnitedStates(the“NonBuyingRate”)on31December2024,andthetranslationofHongKong

dolaramountsintoU.S.dolarshasbenmadeatherateofHK$7.7677perU.S.$1.00,theNon

BuyingRateon31December2024.NorepresentationismadethatheRenminbiamountsortheHong

KongdolaramountsreferedtointhisOferingCircularcouldhavebenorcouldbeconvertedinto

U.S.dolarsatanyparticularateoratal.

ROUNDING

InthisOferingCircular,whereinformationhasbenpresentedinthousandsormilionsofunits,

amountsmayhavebenroundedupordown.Acordingly,totalsofcolumnsorowsofnumbersin

tablesmaynotbequaltotheaparentotaloftheindividualitemsandactualnumbersmaydiferfrom

thosecontainedhereinduetorounding.Referencestoinformationinbilionsofunitsaretothe

equivalentofathousandmilionunits.

WARNING

ThecontentsofthisOferingCircularhavenotbenreviewedbyanyregulatoryauthorityofany

jurisdiction.YouareadvisedtoexercisecautioninrelationtotheoferingoftheBonds.Ifyouarein

anydoubtaboutanyofthecontentsofthisOferingCircular,youshouldobtainindependent

profesionaladvice.

CERTAINDEFINITIONSANDCONVENTIONS

InthisOferingCircular,unlesotherwisespecifiedorthecontextotherwiserequires,alreferencesto

the“Group”,“we”,“us”and“our”andwordsofsimilarimportaretotheIsuer,theGuarantorandits

othersubsidiariesandasociatedcompaniestakenasawhole,alreferencestothe“PRC”and“China”

aretothePeople’sRepublicofChina(excludingHongKong,theMacauSpecialAdministrativeRegion

ofthePeople’sRepublicofChinandTaiwan),alreferencestothe“PRCgovernment”orthe“State”

meansthecentralgovernmentofthePRC,includingalpoliticalsubdivisions(includingprovincial,

municipalandotheregionalorlocalgovernmentalentities)andinstrumentalitiesthereof,or,wherethe

contextrequires,anyofthem,alreferencestothe“UnitedStates”and“U.S.”aretotheUnitedStates

ofAmerica,alreferencesto“HongKong”aretotheHongKongSpecialAdministrativeRegionofthe

People’sRepublicofChina;alreferencesto“HongKongdolars”and“HK$”aretothelawful

curencyofHongKong,alreferencesto“Renminbi”and“RMB”aretothelawfulcurencyofthe

PRC,alreferencesto“U.S.dolars”,“USD”,“US$”and“U.S.$”aretothelawfulcurencyofthe

UnitedStatesofAmerica,referencesto“sterling”or“£”aretothelawfulcurencyoftheUnited

Kingdom,referencesto“EU”aretotheEuropeanUnion,andreferencesto“euro”or“€”aretothe

lawfulcurencyofmemberstatesoftheEuropeanUnionEUthatadopthesinglecurencyintroduced

inacordancewiththeTreatyestablishingtheEuropeanComunity,asamendedfromtimetotime,and

alreferencesto“CAGR”meansthecompoundanualgrowthrate.

TheEnglishnamesofPRCnationals,entities,departments,facilities,laws,regulations,certificates,

titlesandthelikearetranslationsoftheirChinesenamesandareincludedforidentificationpurpose

only.Intheventofanyinconsistency,theChinesenameprevails.

FORWARD-LOKINGSTATEMENTS

TheIsuerandtheGuarantorhavemadecertainforward-lokingstatementsinthisOferingCircular.

AlstatementsotherthanstatementsofhistoricalfactscontainedinthisOferingCircularconstitute

“forward-lokingstatements”.Someofthesestatementscanbeidentifiedbyforward-lokingterms,

suchas“anticipate”,“target”,“believe”,“can”,“would”,“could”,“estimate”,“expect”,“aim”,

“intend”,“may”,“plan”,“wil”,“would”orsimilarwords.However,thesewordsarenothexclusive

meansofidentifyingforward-lokingstatements.Alstatementsregardingexpectedfinancialcondition

andresultsofoperations,businesplansandprospectsareforward-lokingstatements.These

forward-lokingstatementsincludebutarenotlimitedtostatementsastothebusinestrategy,revenue

andprofitability,planedprojectsandothermatersastheyrelatetotheIsuerand/ortheGuarantor

and/ortheGroupdiscusedinthisOferingCircularegardingmatersthatarenothistoricalfact.These

forward-lokingstatementsandanyotherprojectionscontainedinthisOferingCircular(whethermade

bytheIsuer,theGuarantororbyanythirdparty)involveknownandunknownrisks,includingthose

disclosedunderthecaption“RiskFactors”,uncertaintiesandotherfactorsthatmaycausetheactual

results,performanceorachievementsoftheIsuer,theGuarantorortheGrouptobematerialydiferent

fromanyfutureresults,performanceorachievementsexpresedorimpliedbysuchforward-loking

statementsorotherprojections.

Theseforward-lokingstatementspeakonlyasathedateofthisOferingCircular.EachoftheIsuer

andtheGuarantorexpreslydisclaimsanyobligationorundertakingtoreleasepubliclyanyupdatesor

revisionstoanyforward-lokingstatementcontainedhereintoreflectanychangeintheGroup’s

expectationswithregardtheretoranychangeofevents,conditionsorcircumstances,onwhichany

suchstatementwasbased.

Thefactorsthatcouldcausetheactualresults,performancesandachievementsoftheIsuer,the

Guarantor,theGrouporanymemberoftheGrouptobematerialydiferentinclude,amongothers:

•futuredevelopments,trendsandconditionsintheindustryandmarketsinwhichtheGroup

operates;

•theabilityoftheGrouptosucesfulyimplementitsbusinesplansandstrategies;

•thecontinuedavailabilityofcapitalandfinancing;

•interestratesandforeignexchangerates,taxesanduties;

•abilityoftheGrouptocontrolitscosts;

•generaleconomicandbusinesconditionsandcompetitivenvironmentinthePRCandelsewhere;

•abilityoftheGrouptomaintainitsalescontractswithitsmajorcustomersontermscomercialy

aceptabletotheGrouporatal;

•naturaldisasters,industrialaction,teroristatacksandothereventsbeyondtheGroup’scontrol;

and

•otherfactors,includingthosediscusedin“RiskFactors”.

GLOSARYOFTECHNICALTERMS

Theglosaryoftechnicaltermscontainsexplanationsandefinitionsofcertaintermsusedinthis

OferingCircularinconectionwiththeIsuerand/ortheGuarantorand/ortheGroupandtheir

busineses.Thetermsandtheirmeaningmaynotcorespondtomeaningsorusageofthesetermsas

usedbyothers.

adjustedrentalyield

aweightedaveragecalculatedasthesumofexpected

anualisedgrosleasereceiptandgovernmentgrantsdivided

bythenetbokvalueofaircraft

aircraftloan

bankborowingsobtainedfrombanksandfinancial

institutionsforthepaymentoftheaircraftpurchaseprice;

aircraftpurchaseandleaseback

aleasearangementwherebyoneparty(thelesor)purchases

anaircraftfromanother(thelese)andleasesitbackfor

long-termuse;

cargoaircraft

aircraftoperatedbyanairlineorcargoairlinefortransporting

cargo;

Chineselesor

anaircraftleasingcompanywhichisincorporatedinthePRC;

comercialaircraft

pasengeraircraftandcargoaircraftoperatedbyanairline

operator,excludingtheaircraftoperatedbymilitary,private,

businesjetandgeneralaviationoperators;

directaircraftpurchaseandlease

aleasearangementwherebyoneparty(thelesor)purchases

anaircraftandsubsequentlyleasestoathird-party(the

lese),pursuantowhichthelesormayormaynothave

securedtheleasingathetimeofpurchaseoftheaset;

financelease

aleasearangementclasifiedundertheHKFRSandour

acountingpolicies,pursuantowhichsubstantialyalofthe

risksandrewardsofownershipoftheleasedasetsare

transferedfromthelesorstotheleses;

foreignlesor

anyaircraftleasingcompanywhichisnotaChineselesor;

ful-lifecondition

theconditionofanaircraftasumingthatalmajor

maintenanceventshavejustbenfulyrestoredoroverhauled

toitszero-timecondition,inwhichtheairframeisfreshfrom

itsheavycheck,thelandingearisfreshfromanoverhaul,the

enginesarefreshfromaperformance-restorationshopvisit

andalengineLifeLimitedParts(LPs)havezerocyclesof

utilisationsincenew;

LIBOR

LondonInterbankOferedRate,theaverageinterestrate

estimatedbybanksinLondonthatheywouldbechargedif

borowingfromotherbanks;

narowbodyaircraft

single-aisleaircraft,suchasAirbusA320familyaircraft(A3

19/320/321series)andBoeing737NGseries

(B737-700/800/900series);

operatinglease

aleasearangementclasifiedundertheHKFRSandour

acountingpolicies,pursuantowhichsubstantialyalofthe

riskandrewardsoftheleasedasetsremainwiththelesors;

pasengeraircraft

aircraftoperatedbyanairlinewiththeprimaryintentionof

transportingpasengers.Itmayalsocarycargointhelower

deckoraircraftbely;

PDP

pre-deliverypayment,aprogrespaymentobemadebythe

purchasertoaircraftmanufactureratdiferentmilestones

whenthenewaircraftorderedbythepurchaserarebeingbuilt;

PDPfinancing

bankborowingsobtainedfrombanksandfinancial

institutionsforthepaymentofPDP;

regionaljet

Acomercialjetaircraftcaryingfewerthan100pasengers

suchasComercialAircraftCorporationofChina,Limited

(中国商用飞机有限责任公司)(“COMAC”)C909(formerly

knownas“ARJ21”);

revenuepasengerkilometreor

RPK

anindustrystandardmeasureofpayingpasengersflown

traficwhereoneRPKrepresentsonekilometretraveledbya

payingcustomer;

SPCs

specialpurposecompaniesestablishedforthepurposeof

actingastheregisteredownersofouraircraft.Thelesorsin

leasetransactions,andtheborowersoftherelevantaircraft

loansforaircraftacquisitions;and

widebodyaircraft

twin-aisleaircraft,suchasAirbusA330seriesandBoeing777

series.

TABLEOFCONTENTS

Page

SUMARY.1

SUMARYOFTHEOFERING.13

SUMARYCONSOLIDATEDFINANCIALINFORMATIONOFTHEGUARANTOR.17

RISKFACTORS.20

USEOFPROCEDS.49

CAPITALISATIONANDINDEBTEDNESOFTHEGUARANTOR.50

TERMSANDCONDITIONSOFTHEBONDS.51

SUMARYOFPROVISIONSRELATINGTOTHEBONDSINGLOBALFORM.72

INDUSTRYOVERVIEW.74

DESCRIPTIONOFTHEISUER.76

DESCRIPTIONOFTHEGROUP.77

MANAGEMENT.109

SUBSTANTIALSHAREHOLDERS.115

TAXATION.117

PRCREGULATIONS.121

SUBSCRIPTIONANDSALE.126

GENERALINFORMATION.132

INDEXTOFINANCIALSTATEMENTS.F-1

SUMARY

Thesumarybelowisonlyintendedtoprovidealimitedoverviewofinformationdescribedinmore

detailelsewhereinthisOferingCircular.Asitisasumary,itdoesnotcontainaloftheinformation

thatmaybeimportantoinvestorsandtermsdefinedelsewhereinthisOferingCircularshalhavethe

samemeaningswhenusedinthisumary.ProspectiveinvestorshouldthereforereadthisOfering

Circularinitsentirety.

OVERVIEW

Weareanindependentinternationalaircraftleasingcompanyaswelasaone-stopaircraftsolutions

providerengagingintwomajorsegments,aircraftleasingandaviationaftermarketservices.Unlike

traditionalaircraftlesors,weareaone-stopaircraftfulife-cyclesolutionsproviderforglobalairlines

andaircraftasetowners.TheGroup’sconventionalbusinesincludesprovisionofaircraftoperating

leasing,purchaseandleaseback,portfoliotradingandasetmanagement.TheGroupalsocoverscore

value-adedservicesuchasfletupgrades,aircraftmaintenance,repairandoverhaul(“MRO”),

aircraftdisasemblyandcomponentsalesthroughourasociatecompanyARIandairlineoperations

servicesthroughourjointventure,PTransNusaAviationMandiri(“TAM”).

Establishedin2006,wearethefirstoperatingaircraftlesorinChinandhasbenapionerinpushing

forwardthedevelopmentofaircraftleasingindustryinChina.In2010,webecamethefirstwholy

foreignownedaircraftlesoregisteredinChina.In2014,webecamethefirstChineselesortoplacea

bulkorderfor100A320swithAirbusandiscurentlyChina’slargestlesorwithdirectorderswith

originalequipmentmanufacturers.In2015,wewerethefirstoperatinglesoralowedtoforma

cros-borderforeigncurencyfundpol.Asweimplementourfulvaluechainstrategy,webuiltupthe

firstlarge-scaleaircraftdisasemblyfacilityinAsiawhichcomencedoperationin2018.Wearethe

firstChinesenterprisewithlicensespaningacrosaircraftleasing,MRO,disasemblyandparts

trading.WehavebenlistedontheHongKongStockExchangesince11July2014andwearethefirst

listedaircraftlesorinAsia.Furthermore,wewerenamedasthe“AircraftLesoroftheYear”forfour

consecutiveyearsfrom2015to2018byGlobalTransportFinance.Wewerenamedasthe“Asia-Pacific

LesoroftheYear”fortwoconsecutiveyearsin2017and2018andwonthe“Editor’sDealoftheYear

forInovation”awardin2018presentedbyAirlineEconomics.Withastrongorderbok,wewere

listedasoneofthetopthreglobalesorsfrom2020to2022byAirfinanceJournal.Wewon

“Asia-PacificLeaseDealoftheYear”awardinboth2022and2024,“SustainabilityDebtDealofthe

Year”in2023and“Asia-PacificStructuredFinanceDealoftheYear”in2024,alpresentedbyAirline

Economics.WhilewekepconsolidatingourleadingpositioninChina,wehavealsoimplementedour

globalisationstrategysince2015andhavestablishedapresenceinAsiaPacific,theMidleEast,

Europe,NorthAmerica,LatinAmericandAfrica.

Throughoutourbusinesdevelopmenthistory,wehavestablishedourbusinesmodelfordirect

aircraftpurchaseandleasetransactions,aircraftpurchaseandleasebacktransactionswithleading

airlineoperators,andportfoliotradingwiththird-partylesorsandinvestors.Ourbusinesmodelalows

ustoprovidediferentaircraftleasingtransactionstructuresthroughourSPCs.Ouraircraftleasing

businesisfocusedongeneratinglong-termandstablecashinflowsofleaseincometomatchthecash

outflowsfortherepaymentinstalmentsofasociatedaircraftloans.

WeuseSPCstoenterintoaircraftleaseagrementswithairlineoperators.Theleasetermsofour

long-termaircraftleaseagrementsaresuficientlylongtocovertherepaymentermsofouraircraft

loans(otherthanthebalonpayment,whichiscoveredbytheresidualvalueoftheaircraft).This

arangementisdesignedtoreduceourliquidityriskasociatedwithshort-termaircraftacquisition

financing.Uponthexpirationoftheaircraftleaseagrements,werequireourairlinelesestoreturn

toustheleasedaircraftinful-lifeconditionorsuchotherconditionastipulatedintherelevantlease

agrements.Asat31December2024,ourleaseagrementsinrespectofaircraftpurchasedfrom

originalequipmentmanufacturerswereofanaverageoriginaleasetermofaproximately8to12years.

Pursuantotheaircraftleaseagrements,ourairlinelesesenjoythexclusiverightousetheleased

aircraftduringthetermoftheaircraftleaseagrements.Ourairlinelesesarerequiredtosetlethe

leasepaymentsonamonthlyorquarterlybasis,andarealsoresponsibleformostcosts,expensesand

insuranceinvolvedinthemaintenanceandoperationoftheaircraftduringtheleaseterm.Wealso

requireourairlinelesestomaintainvalidinsuranceagainstaliabilitiesinvolvedintheoperationof

theleasedaircraftincompliancewiththeaplicablelawsandregulationsintheplacewheretheaircraft

operates.

PriortoDecember2010,weusedourSPCsestablishedintheCaymanIslandsandIrelandasthelesors

foraircraftleasedtoairlineoperatorsinChina.SinceDecember2010andOctober2012,wehave

startedusingourSPCsinTianjinDongjiangFreTradePortZoneandShanghaiPudongAirportFre

TradeZone,respectively,aslesorstoenterintoaircraftleasingtransactionswithairlineoperatorsin

China.InAugust2011,wefirstgainedrecognitionintheChineseaircraftleasingmarketfolowingthe

sucesfuldeliveryofanaircraftoShandongAirlinesthroughourSPCsestablishedinTianjin

DongjiangFreTradePortZone.InMarch2013,wesucesfulycompletedanovationoftheleaseof

anaircraftoChinaSouthernAirlinestourSPCestablishedinShanghaiPudongAirportFreTrade

Zone.LeveragingthetransactionstructureinvolvingourSPCsinChina,wecanasistourairline

customerstoreducetheiroveraleasingcostandwitholdingtaxobligationandtherebyenhancetheir

competitivenes.Ourtransactionstructuretogetherwithourvalue-adingservicesprovideincentivesto

bothofourexistingandpotentialairlinecustomersinChinatouseouraircraftleasingservices.

Welease,deliverandmanageaircraftoleadingairlinesinChinandglobaly,suchasAirChina,China

EasternAirlines,ChinaSouthernAirlines,ChengduAirlines,SichuanAirlines,ShenzhenAirlines,

XiamenAirlines,AirMacau,ChinaAirlines,UnitedAirlines,FrontierAirlines,HawaianAirlines,

LufthansaGroup,Iberia,LATAMAirlines,KoreanAir,AirIndia,RoyalJordanian,CebuPacificAir,

VirginAustralia,DATAirlines,etc.Ourairlinecustomersalsoincludeairlineoperators,suchasChina

EasternAirlines,towhomweprovidevalue-adingservicesincludingtradingandmarketingofused

aircraft.

Wehavebenveryselectiveinthetypeofaircraftasetstobeincludedinourportfolio.Wehavea

modernandnarowbody-dominantaircraftflet.Ourownedfletsizewas159aircraftasat31

December2024,90%ofwhicharenarowbodyaircraftbynumberofaircraft.Thenarowbodyaircraft

typesincludeAirbusA320familyaircraftandBoeing737familyaircraft,andthewide-bodyaircraft

typesincludeAirbusA330familyaircraftandBoeing787aircraft.Theaverageageofouraircraftflet

was8.5yearsasat31December2024.Otherthanthe159aircraftownedbyus,anaditional30aircraft

aremanagedbyusasat31December2024.

Asat31December2024,bynumberofaircraft,68.6%ofourownedfletwereonleasetoChinese

airlinecustomers(includingHongKong,MacauandTaiwan),mostofwhicharestate-ownedairlines

withfinancialstrength.Ourself-ownedflethadanaverageremainingleasetermofaproximately6.1

yearsasat31December2024.Wecontinuedtopursueourlong-standingstrategyofinvestingin

modernaircrafthatarethemostfuel-eficientandsought-aftercategoryasweprepareourselvesfor

recoveryandgrowthinthefuture.Asof31December2024,wehad124aircraftinourorderbok,tobe

deliveredinstagesby2028,comprising97AirbusA320neoaircraft,and27COMAC909aircraft.

Theoveraloperatingenvironmentoftheindustrycontinuestoimprove.Onthedemandside,market

growthremainedrobust.AcordingtothedatafromIATA,totalglobalairtrafic(measuredinRPKs)in

2024increasedby10.4%year-on-yearwhiletheoveraloadfactoreachedahistoricalhighof83.5%.

China’scivilaviationmarketachievedequalyencouragingperformancewitharecord730milion

pasengerstransported,markinga17.9%year-on-yeargrowth.Onthesuplyside,multiplechalenges

persistedincludingcapacityconstraints,labourandengineshortages.WhileAirbusmiseditsanual

deliverytargetfor2024,Boeing’sful-yeardeliveriesdeclinedbyover30%year-on-year.The

continuingsuplyshortagefurtherpushedupaircraftleaseratesandvalues.Meanwhile,folowingthe

USdolarinterestratecutsduringtheyear,thescaleoftheconsecutivereductionsurprisedthemarket,

loweringfundingcostsfortheindustrywhilebostinglobalaircraftradingmarketactivities.Against

thisbackdrop,wefulyleveragedouradvantagesinfulvaluechainoperationsandqualityfletasets

tocapturetheoportunitiesarisingfromthegrowingdemand,therisingaircraftvaluesandtheratecuts

cycle.

WeareanesentialinvestedcompanyofChinaEverbrightLimited(“CEL”)andweadheretothe

misionandvisionof“integratingindustriesandfinancing,andcontributingtoChina’srisingaviation

strength”,whiledepeningandoptimisingthemodelof“integratingindustriesandfinancingin

aviation”,andcontinuouslystrengtheningourcapacityinaircraftfulife-cyclevaluechain.Westrive

tobecometheglobalyleadingaircraftful-value-chainsolutionsuplier.

Inourconsistentpursuitofhigh-qualitysustainabledevelopment,wehavebecomeanindispensable

partoftheaviationindustrychainbyexpandingitsglobalpartnernetworkandexploringdiverse

businesmodels,whilestrengtheningourone-stopsolutionsandasetmanagementcapabilities.During

2024,wefurtheroptimisedourglobalcustomerbaseandachievedbreakthroughsintheleasing

busines.Ononehand,wedepenedlong-termcoperationwithstate-ownedairlinesinChina’s

domesticmarket,representedbythe“TopThre”airlines(三大航)andtheirsubsidiaries,continuously

extendingcoperationscopewithflexiblefletsolutionoferings.Ontheotherhand,weactively

expandedourqualityclienteleglobaly.Weachievedourfirstcoperationwithglobaltop-tierairlines

suchasLufthansaGroupandCebuPacificAir,byreposesionandredeliveryaswelasre-marketing

uponfirstleasexpiry.Thishasfurtherenhancedandiversifiedthegeographicalmixofourcustomer

base.

During2024,weproactivelyseizedtheoportunitiespopedupintheindustry’supwardcyclewhere

aircraftmarketvaluecontinuedtorise,achievingscaledgrowthinourordinarycourseofaircraft

tradingbusines,withanualtransactionvolumehitingarecordhigh.Throughdiversifiedaset

portfoliosandtransactionstructures,werespondedtovariouspreferencesofbothdomesticand

overseasinvestorsinasetalocationandmanagement.Whilesucesfulyadingeightnewaircraft

tradingpartnerstourglobalnetwork,wealsoexpandedourmanagedfletsize,furtherenhancingits

asetradingandmanagementcapabilities.

Wealsomadeinovativebreakthroughsinfinancingduring2024,continuouslyexpandingand

optimisingouronshoreandofshorefundingsources.Thisincludedsucesfulisuanceofourfirst

perpetualmedium-termnotesinthePRCmarketandclosingourinauguralwarehousefacilityfor

aircraftprojectfinancingintheinternationalmarket.Thesefortsfurtherwidenedourinovative

financingchanelsandhighlightedourcomitmentostrategicgrowthandfinancialinovation.

OURCOMPETITIVESTRENGTHS

Ourcorecompetenceliesinourdistinctiveandresilientbusinesmodel,whichgivesusthecompetitive

strengthstograsptheoportunitiesbroughtbytherobustgrowthinaviationdemandpost-COVID-19

pandemicandtocapitaliseonthegrowthoportunitiesinthehigh-growthChinaircraftleasing

industry.Ourkeystrengthsinclude:

Positioningourselvesasafulife-cycleaircraftsolutionsprovider

Wehavebencontinuouslyenhancingouraircraftfulvaluechainoperationsandextendingourservice

coveragetoalmajorsegmentsoftheaircraftaftermarket.

ARIoperatesaglobalife-cyclesolutionsplatformtosuportourvaluechainecosystemwithourdual

aircraftrecyclingbasesinHarbin,PRCandintheUnitedStates,whichismanagedbyitswholy-owned

subsidiary,UniversalAsetManagement,Inc.(“UAM”),whospecialisedinaircraftdisasembly,ful

recyclingsolutions,componentsales,warehousingandthird-partylogisticsheadquarteredintheUnited

States.ARIanditsubsidiarieshaveprovidedvariousaircraftinspection,consultancyandaircraft

technicalrelatedservicestotheGroupfromtimetotimeandhavegeneratedstableincomeforthe

Group.ThroughChinaAviationAftermarketHoldingsLimited(“CAM”),ARI’sasociatecompany,

wecompletedcomprehensivesolutionsforfiveoldaircraftsacquiredfromAirChinaLimitedtoasist

theairline’sfletretirementplan,sucesfulymaximizingtheresidualvalueoftheseasetsthrougha

seriesofcomplexsustainabilitysolutionsincludingpartswap,P2Fconversions,portfoliotrading,

aircraftdisasembly,componentrepairandsales.Wehavefurtherstrengthenedcustomerloyaltyand

strengthenedbusinesoportunitieswithourstrategicoperationwithUAM,whereweidentified

LATAM’sairframeretirementneduringanewaircraftleasingdiscusionandUAMengagedwith

LATAMtopurchasesixA320airframefordisasembly.

Wehavecontinuedtodevelopourselvesasafulife-cycleaircraftsolutionsproviderfortheglobal

aviationairlinesandaircraftasetowners.Suchbusinesmodelhasbenefectiveaswehavebenable

toleverageoftherespectiveresourcesandsynergiesamongourmembercompaniesandafiliated

companies,enablingustoferservices,throughourselvesand/ortogetherwithsuchcompanies,

coveringeverystageofanaircraftlife-cycle,including(a)aircraftorderingandprocurement;(b)

aircraftleasing,purchaseandleaseback,andportfoliotrading;and(c)aircraftdisasemblyand

componentsales,andMRO.Ourbusinesmodelalsomadeusoneoftherarefewthatcouldprovide

customerswithone-stopfletupgradesolutionsaswenotonlyhavealargeorderbokcomprisedof

new-generationfuel-eficientaircrafthatcanhelpairlinecustomersoptimizetheirfletsandreduce

carbonemisions,butalsocouldprovideprofesionaloldaircraftsolutionsandservicestoasist

airlines’fletretirement.Thisalsoputsusinabeterpositionintheglobaltrendofgrenaviation.

Wealsoextendedownstreamalongtheaviationvaluechainintothend-usersegmentofurther

enhanceourbusinesynergies.InMarch2020,weacquireda72.82%interestinAviationSynergy

Ltd.,whicholdsa49%indirectequityinterestintheIndonesianregionalairline,TAM.InJanuary

2021,weplacedafirmorderfor30C909aircraftand,togetherwithChinaEverbrightGroup(“CEG”)

andCEL,furtheredourstrategicoperationwithCOMACinthefieldsofaircraftasetmanagement,

MROandaviationaftermarketservices.InDecember2022,wesucesfulydeliveredaCOMAC909

aircraftoIndonesiacarierTransNusa,markingthefirstimeforaChina-maderegionalpasengerjet

toentertheoverseasmarket.TheaircraftwasoficialyputintocomercialoperationinApril2023,

andwehavedeliveredatotalofthreCOMAC909aircraftoTransNusabyendof2024.

Narowbody-dominantaircraftfletleasedtotopclasclients

Asat31December2024,90%ofourownedflet,bynumberofaircraft,arenarowbodyaircraft.The

averageageofouraircraftfletwas8.5yearsandwehadatotalordercomitmentof124narowbody

aircraftandregionaljetobedeliveredby2028.Narowbodyaircraftisahighlyliquidasetclasand

themostpopularaircraftypemainlyservedomesticroutesandshort-haulflights,whichadled

recoveryintheaviationindustryfromthepandemic.Withundergoinglow-carbontransitionofthe

aviationindustryandrisingfuelprice,demandforourmodernflethavebenincreasingamongsthe

airlinesglobalyforitsfueleficiencyandlowcostofmaintenanceascomparedwiththeoldermodels

ofaircraft.

TheGroup’saircraftfletismainlyleasedtotopclasclients.Asat31December2024,bynumberof

aircraft,68.6%oftheGroup’sownedfletwereleasedtoChineseairlinecustomers(includingHong

Kong,MacauandTaiwan),mostofwhicharestate-ownedairlineswithfinancialstrength.Asat31

December2024,theGroup’soveralcustomerbase(includingbothownedandmanagedaircraft)covers

40airlinesin21countriesandregionsglobaly.

Withtheimplementationofincreasinglystringentenvironmentalregulationsoncarbonemisionlevel

byaircraft,oldermodelsofaircraftarecostliertomaintain,operateandmodifytobringitin

compliancewiththenvironmentalstandards.Inadition,thereisanincreasingdemandforairlinesin

Chinatoupgradetheirfletswithnewmodelsbecauseofueleficiencyandeaseofoperationsand

maintenance.Inlightofalthesefactorsandfavourablegovernmentalpolicies,ourmodernfletgives

usthestrengthofhavingasustainablebusinesmodelwithconstantcashflowofleaseincome.

Theleasexpiryprofileandeliverypipelinearewel-positionedtocapturerisingleaserate

Wehaveastrongtrackrecordofplacingouraircraft,bothnewdeliveriesandreturnedaircraft,in

advance,achievingconsistentlyhighutilisationrateofourownedflet,evenduringtheCOVID-19

pandemic.Asat31December2024,excludingoneaircraftinvolvingaRusianairline,theGroup’s

ownedfletmaintaineda100%utilisationrate.

Thecurentmarketdynamicsfurthersuportourpositioning.Post-pandemicsuplychaindisruptions

havexacerbatedaircraftshortages,drivingleaseratesupwardoverthepastwoyears.Witha

concentratedwaveofleasexpiriescoincidingwithschedulednewdeliveriesbetwen2025and2027,

wearestrategicalypositionedtoplaceoremarketheseaircraftathigherleaserates.Theoveral

rentalyieldofourownedfletisexpectedtotrendup.

ReadyacestodiverseandflexiblefundingsourcesacrosbothPRConshoreandofshore

platforms

Giventhechalengingbusinesenvironment,managingliquidityisvitaltotheaviationindustryforits

recovery.Wewilcontinuetoadvanceouronshoreandofshoreplatformstoflexiblytapoportunities

toacesqualityfundingsources,includingactivelyexploringrenfinancingoportunities,andthe

diversityofundingchanelshavenabledustoreadilyacesvariousbanks,financialinstitutionsand

investorswithmultiplefinancingproducts.

Bankloansremainthemainsourceofundingforourfletandbankshavegivenadequatecreditlines

tosuportourbusinesdevelopment.Withthelong-termleaseagrementswithourairlinecustomers,

weareabletosecureaircraftloansfromcomercialbanksforaircraftacquisitions,therebyalowingus

tomanageourliquidityriskbymatchingthecashinflowsandoutflowsthroughthereceiptoflease

incomeandthepaymentofregularloanrepayments,respectively.AswehavestablishedourSPCsin

China,wealsohavetheflexibilitytosecureacquisitionfinancinginChina,whichisanadvantagewe

haveoverforeignlesorsoutsideChina.Fortheyearended31December2024,totalnewfacilitiesand

renewedfacilitieswerearoundHK$24bilion,includingaircraftloans,PDPfinancing,workingcapital

facilities,RMBbondsetc.

InviewofthelowerinterestratenvironmentinthePRCdomesticmarket,theGroupstrovetoreduce

itsoveralfinancingcostsbyproactivedebtmanagementhroughincreasingRMBdebtfinancing.

During2024,theGroupsucesfulyisuedRMB0.3bilion3-yearandRMB1.2bilion5-year

medium-termnoteswithacouponrateof2.75%and3.3%respectively.Asat31December2024,RMB

andUSDdebtsacountedforaproximately28%and72%oftheGroup’sinterest-bearingdebts

respectively.During2024,theGroupcompletedrefinancingofitsperpetualcapitalsecuritiesto

optimisecapitalstructurewhilefectivelyreducingfundingcosts.Folowingthevoluntaryredemption

ofthexpensiveUSDperpetualbondsinDecember2023andJuly2024,theGrouplaterisuedRMB1

bilionperpetualmedium-termnotesinPRCmarkethroughitsubsidiary,CALC(Tianjin),witha

couponrateofonly2.7%.InFebruary2025,CALC(Tianjin)sucesfulyisuedRMB1.5bilion5-year

corporatebondswithafixedcouponrateof2.38%.

InMay2023,CALC(Tianjin)receivedanAisueratingfromDagongGlobalCreditRatingCo.,

Ltd,andanupgradetoAratingfromChinaChengXinInternationalCreditRatingCo.,Ltd,both

withastableoutlok.InDecember2024,wereceivedourfirstinvestment-gradeinternationalratingof

Ag-withastableoutlokfromChinaChengxin(AsiaPacific)CreditRatingsCompanyLimited,

markinganimportantsteptowardsbecominganinternationalinvestment-gradeisuer.

WehavealsoreceivedstrongsuportfromtheasociatecompaniesunderCEG,providinguswith

standbycreditsandcomitedworkingcapitalfacilitiesinaditiontoliquidityprovidedbycomercial

banks.

Asat31December2024,theGrouphadcashandbankbalancesofHK$4,079.4milionandundrawn

borowingfacilitiesofHK$9,624.6milion,andtheGroup’stotalbalanceofcashandbankbalances

withundrawnborowingfacilitieswasHK$13,704.0milion.Inviewoftheforegoingmeasures,despite

thebackdropofachalengingenvironment,theGrouphasgatheredrichamunitiontotap

oportunitiesfromtheiminentrecoveryofitskeyaviationmarketsinChinandtheregion.

StrongsuportreceivedfromChinaEverbrightGroup

WehavereceivedstrongsuportfromCEG,whichisprovidedthroughCEL,ourlargestshareholderas

welastheasociatecompaniesunderCEG.CALCisthekeyinvestecompanyofCELandtheflagship

unitofCEGintheaircraftleasingsegment.InJanuary2021,wesignedatripartiteprojectinvestment

coperationmemorandumwithCELandCOMACtocoperateintheareasofoverseasoperationof

aircraftmadeinChina,aircraftasetmanagementandaviationaftermarket.ThisispartofCEG’swider

strategicframeworkwithCOMACastheyexplorecoperationinaviationfield.ChinaEverbrightBank

isalsocurentlyoneoftheCALC’skeyrelationshipbanksandprovidesuswithacestodiversified

rangeofshort-termandlong-termfinancingfundingchanels.

Beingoneoftheforerunersinthehigh-growthChinaircraftleasingindustrywithadistinctive

businesmodelandaprovensucesfuloperatingtrackrecord.

China’sdomesticandinternationalairtravelhasdemonstratedstrongresilienceandrecoveryduring

andaftertheCOVID-19pandemic.PriortotheCOVID-19pandemic,China’saircraftleasingindustry

hasbengrowingrapidlyasaresultofthecontinuousexpansionoftheairlineindustry,favourable

governmentpolicies,andthefacthataircraftleasingafordsairlinecompaniesrelativelylowinitial

capitalinvestmentandfletplaningflexibility.Post-COVID-19pandemic,theaviationmarketin

Chinahasfulyrecoveredandbenbacktogrowthwithpasengertrafichitrecordhigh.Withour

establishedbusinesmodel,wearewel-positionedtocapitaliseonthegrowingaircraftleasing

oportunitiesfromtheairlinesinChina.

Ourbusinesmodel,whichisacombinationofanofshoreplatformforaircraftacquisitionand

financingandanonshoreplatformfordiferentleasingstructures,togetherwithourasetmanagement

capabilities,distinguishesusfromotherdomesticandforeignlesorsinChinainthefolowingaspects:

Aircraftacquisition

WedistinguishourselvesfromourcompetitorsinChinaircraftleasingindustrybyourabilitytosource

newandusedaircraftfromtheoverseasaircraftmanufacturersandtheinternationalsecondaryaircraft

market.Ouraircraftacquisitioncapabilityalowsustoengageindirectpurchaseofaircraftforleasing

purposesandasuch,wecanmanageouroveralaircraftportfoliointermsofaircraftmodel,aircraft

age,andresidualvalue.Asof31December2024,wehadtotalordercomitmentsof124aircraftobe

deliveredby2028,exceding70%oftheGroup’sownedfletsize,providingstrongsuportforfuture

growth.

WehavestablishedSPCsinTianjinDongjiangFreTradePortZoneandShanghaiPudongAirport

FreTradeZone,andtheyareourwholy-ownedsubsidiariesinChina.

UnderthecurentaxlawsinChina,airlinesinChinarerequiredtowitholdtaxupto10.0%onlease

paymentspaidtointernationaleasingcompaniesoutsideChina.SinceDecember2010,folowingthe

establishmentofCALC(Tianjin)asthefirstwholy-foreignownedaircraftleasingcompanyinTianjin

DongjiangFreTradePortZone,weoferourairlinecustomersanonshoreleasingplatforminChina

whichcanasistourairlinecustomerstoreducetheiroveraleasingcostandthereby,enhancetheir

competition.

Wearethereforeabletofercompetitiveleasetermsandeliveraircraftourairlinecustomers

withinarelativelyshortperiodoftime,therebyreducingthetimeandtheuncertaintiesinvolvedinthe

aircraftprocurementprocesforourairlinecustomers.

Flexibleleasestructures

OuronshoreleasingplatforminChinacouldatractpotentialairlinecustomerstoenterintobusines

withus,ascomparedwiththeleasingofaircraftfromotherforeignlesors.Weleaseouraircrafto

airlineoperatorsinChinaunderaircraftleaseagrements,pursuantowhichtheairlineoperatorsonly

requiretheaprovalfromtheNDRCbeforenteringintotheaircraftleaseagrementswithus.

Asetmanagementcapabilities

Wehavealsobenabletoprovideone-stop-shopsolutionstourChinesecustomers,whichusualy

encounterdificultiesinmanagingandisposingoftheiragedflet.Forexample,CAM,hasrecently

acquiredfiveoldaircraftfromAirChinandcompletedcomprehensivesolutionstomaximisetheir

residualvaluethroughaseriesofsustainabilitysolutionsincludingpartswap,P2Fconversions,

portfoliotrading,aircraftdisasembly,componentrepairandsales.Suchasetmanagementcapabilities

havenabledustoenhanceourelationshipswithChineseairlinecustomers;andstandoutfromour

competitorsintheChineseleasingmarket.Wearealsoactivelyexploringoportunitiestoexpandour

asetmanagementbusinesthroughportfoliotradingactivities.During2024,wesucesfulysecured

asetmanagementmandatesforfiveoftheaircraftsold.

StableandatractivegrowththroughourorderbokwithAirbus,withwhomwehavestrong

relationship

Wehaveahigh-qualityandgrowingairlinecustomerbaseforaircraftleasingservices.Since2014,we

havexpandedourbusinesintoverseasmarketsinAsia,Africa,EuropeandAmericas.Asat31

December2024,wehadafletof159ownedand30managedaircraft.Ourclientelextendedto40

airlinesin21jurisdictionsandregionsthroughoutheworld,includingAirChina,ChinaEastern

Airlines,ChinaSouthernAirlines,ChengduAirlines,SichuanAirlines,ShenzhenAirlines,Xiamen

Airlines,AirMacau,ChinaAirlines,UnitedAirlines,FrontierAirlines,HawaianAirlines,Lufthansa

Group,Iberia,LATAMAirlines,KoreanAir,AirIndia,RoyalJordanian,CebuPacificAir,Virgin

Australia,DATAirlines,etc.Wehavelong-standingbusinesrelationshipwithourairlinecustomers,

somegoingbackof17yearsandhencepartofourexistingairlinecustomersarerepeatingcustomers

whichmayberetainedbecauseofourfavourableleasetermsandourvalue-adingservices.We

sucesfulydelivered17newaircraftfromorderboktoairlinecustomersandpurchased2used

aircraft,fortheyearended31December2024.Wehavealsosignednewleaseagrementsorletersof

intentfor48aircraftduringtheyear2024,includingorderbokplacement,reposesionand

remarketing,aswelasleasextensions,adresingairlinecustomers’nedsforcapacityexpansionand

futurepipeline.

Ourfletisexpandingtocopewiththeincreasingdemandfromourexistingandpotentialairline

customersforaircraftleasingservices.Asat31December2024,wehadtotalordercomitmentsof124

aircraftobedeliveredby2028.Theseleasecomitmentswilprovideuswithconstantcashinflowsof

leaseincomeinthefutureandthatourstrongaircraftdeliverypipelinenablesustoprovideourairline

customerswithquickdeliveryscheduleunderleasingarangements.

Operationalandfinancialflexibilityduetourindependentstatus

Weareanindependentinternationalaircraftleasingcompanyfocusingaswelasaone-stopaircraft

solutionsproviderontheaircraftleasingmarket.Ourindependentstatusfromajorcomercialbanks,

aircraftmanufacturers,andairlineoperatorsgivesustheflexibilityinselectingtheaircrafthatmatches

ourgrowthstrategiesandstructuringleaseagrementstailoringforthespecificbusinesnedsofour

airlinecustomers.

AircraftlesorsinChinamaybedividedintofourcategories,namelyindependentaircraftlesorsand

aircraftlesorsafiliatedwithcomercialbanks,aircraftmanufacturersandairlineoperators,

respectively.Comparedtoaircraftlesorsafiliatedwithcomercialbanks,wenjoytheflexibilityin

selectingdiferentacquisitionfinancingsolutionsonthebestcomercialtermsoferedbydiferent

banksandfinancialinstitutionswithinandoutsideChina.Wearealsonotsubjectotherestrictionson

leverageandequityaplicabletobankingindustryinChina.Comparedtoaircraftlesorsafiliatedwith

aircraftmanufacturers,wehavetheflexibilityinchosingdiferentaircraftmodelsfromdiferent

aircraftmanufacturersandsourcingaircraftfromthesecondaryaircraftmarket.Comparedtoaircraft

lesorsafiliatedwithairlineoperators,wecanprovideservicestoalairlineswithnocustomerbase

limitations.Hence,asanindependentaircraftlesor,wehaveacestoawidercustomerbaseandhave

greaterflexibilityinstructuringleasingandfinancingtransactions.

Stableandexperiencedmanagementeamwithaproventrackrecord

Weareledbyexperiencedprofesionalswithextensivexperienceinaircraftasetmanagementand

aircraftleasingindustriesinChina.OurMr.AnXuesong,ChairmanoftheBoardandNon-executive

Director,wasapointedon22October2024.HeisalsoanexecutivedirectorofCEL,thevicepresident

ofCELgroup(asdefinedbelow)inchargeofinance,andanon-executiveandnon-independent

directorofYingLiInternationalRealEstateLimited.HeisresponsibleforformulatingtheGroup’s

overalstrategicplaningandirections.OurMr.PonHoMan,Mike,ExecutiveDirectorandChief

ExecutiveOficer,isanentrepreneurandapionerofaviationsectorinChina.Hefoundedthecompany

in2006.OurMs.LiuWanting,PresidentandChiefComercialOficer,hasmorethan15yearsof

experienceintheaircraftleasingindustriesinChina.OurMr.LiGuohui,ExecutiveDirector,Chief

FinancialOficerandChiefStrategyOficer,hasover30yearsofexperienceworkingasasenior

executiveinbluechipandlarge-scalecompaniesandarangedoverU.S.$10bilionofcorporate

financingfacilities.Ourexecutivedirectorsandseniormanagementeamarexperiencedinstructuring

leasetransactions,riskmanagement,aircraftacquisitionfinancing,selectionandeliveryofaircraft,

technicalreview,monitoringandcompliance,andaircraftradingandmarketingwithinandoutside

China.Se“Management”.

Ourbusinesoperationsaremanagedcolaborativelybyouriskmanagementeam,financingteam,sale

andmarketingteamandtechnicalsuportsteam.Mr.JonHoweyistheDeputyChiefOperatingOficer

andHeadofAviationRiskandisresponsiblefortheriskmanagementofourGroup.Oursalesand

marketingteam,withthecolaborativefortsbyMr.LuisAyala,ourChiefDevelopmentOficer,Mr.

DonaldLiu,ourDeputyChiefComercialOficer,GreaterChina,Mr.MatCorley,ourRegionalHead

ofSales&Marketing–theAmericas,Mr.ChristopherDenis-Meyer,ourRegionalHeadofSales&

Marketing–EMEAandMr.QingFang,ourHeadofSalesandMarketing–AsiaPacific&Greater

China,providesacestopotentialaircraftacquisitionandmarketingoportunities.Oursalesand

marketingteamalsofocusesonmaintainingclosecontactwiththeairlinesinChinandglobalyand

developingtransactionstructuresinlinewiththeirbusinesnedsandthelatestmarketandregulatory

environment.OurtechnicalsuportsteamledbyMr.RichardLuo,ourHeadofTechnical&Aset

Management,AsiaPacific&GreaterChina,posesesextensivexperienceintechnicalaspectof

aircraftoperations.Theyregularlymonitortheusageconditionofourleasedaircraftandprovide

technicalsuportsandmarketingserviceofusedaircraftourairlinecustomersaspartofour

value-adingservices.Inrespectofaircraftacquisition,ourtechnicalsuportsteamalsoconducts

technicalreviewsontheaircraftconditionandthemaintenancerecordsfortheusedaircraftandto

ensurethathespecificationsandmodificationsaremetforthenewaircraft.

Throughoutourbusinesdevelopmenthistory,ourseniormanagementdemonstratesprovencapability

tosucesfulyimplementdiferentleasingtransactionstructuresfornewandusedaircraftandfor

majorairlinesunderdiferentmarketconditions.

OURGROWTHSTRATEGIES

Theoveraloperatingenvironmentoftheindustrycontinuestoimprove.Onthedemandside,market

growthremainedrobust.AcordingtothedatafromtheIATA,totalglobalairtrafic(measuredin

RPKs)in2024increasedby10.4%year-on-yearwhiletheoveraloadfactoreachedahistoricalhigh

of83.5%.China’scivilaviationmarketachievedequalyencouragingperformancewitharecord730

milionpasengerstransported,markinga17.9%year-on-yeargrowth.

Onthesuplyside,multiplechalengespersistedincludingcapacityconstraints,labourandengine

shortages.WhileAirbusmiseditsanualdeliverytargetfor2024,Boeing’sful-yeardeliveries

declinedbyover30%year-on-year.

Therapidgrowthofairtravelamidongoingsuplychainisues,coupledwithighinflationand

interestrates,hadbenandisexpectedtocontinuepushingupleaserates.Itisgeneralyexpectedthat

theaircraftshortagewouldlikelypersistforacoupleofyears,contributingtohighmarketvalueand

leaserates.Moreover,globalwaveofcarboneutralityaswelasfuelpricehikeurgesairlinestosped

upupgradingtheirfletstonewgenerationfuel-eficientaircraft.

Takingintoacountouroutlokofthisector,weintendtopursuethefolowingrowthstrategies:

Continueourdevelopmentasafulife-cycleaircraftsolutionsprovider

Wewilcontinueourdevelopmentasafulife-cycleaircraftsolutionsproviderfortheglobalaviation

industryandtoexploitfurthersynergiesintheaviationandaircraftleasingecosystem.

ThroughCAM,wecompletedcomprehensivesolutionsforfiveoldaircraftsacquiredfromAirChina

Limitedtoasistheairline’sfletretirementplan,sucesfulymaximizingtheresidualvalueofthese

asetsthroughaseriesofcomplexsustainabilitysolutionsincludingpartswap,P2Fconversions,

portfoliotrading,aircraftdisasembly,componentrepairandsales.AsthebusinesofARIcontinuesto

developandtakeshape,ARIshalsekstrategicinvestorstofurthersuportitsgrowthandexplore,

amongothers,theposibilityoflistingonastockexchangeinthefuture,therebyenablingARItoraise

morecapitalforgrowth.Wehavealsoenteredintoaco-investmentmemorandumofunderstandingwith

areputablePRCstate-ownedenterprisetodeveloptheaviationaftermarketbusines.

WecontinuedtoenhancetheGroup’strengthsinaircraftoperatingleasingaroundtheworld.The

utilisationrateofourownedflet(excludingoneaircraftinvolvingaRusianairline)remained100%,

benefitingfromarelativelyhighproportionof90%ofnarowbodyaircraftamongtheperlisted

lesors.Wenotonlyprovideaircraftleasingservicescustomisedtoclientrequirements,butalso

unleashedgesinitsfulvaluechainfotholdtointegrateprofesionalysolutionsforoldandretiring

aircraftandcompletepurchase-and-leasebacktransactionsandisposalsofretiringaircraftformajor

airlines,therebyhelpingthemtomitigateresidualrisk.Suchone-stopfletupgradeserviceswel

positionedustograspoportunitiesemergingfromairlines’aceleratedfletrenewalandoptimization

demandinresponsetothetrendofgrenaviation.

Expandingournarowbodydominantfletofaircraft

Wecontinuetoaplyprudentprinciplesinoptimizingourfletportfolio.Asat31December2024,we

had124narowbodyaircraftandregionaljetinourorderbok,tobedeliveredinstagesby2028.In

makingdecisionsonaircraftacquisition,weconsidervariousfactorsuchastheaircraftypeand

model,aircraftage,andtheapetitesoftheairlines.Weplantofocusonarowbodyaircraftwhichare

suitablefordomesticroutesandshort-haulregionalflights.TheGroupcontinuestopursueits

long-standingstrategyofinvestinginewgenerationandfuel-eficientaircraftwhichareprovento

havelongusefulives,morelikelytobeincompliancewiththestringentenvironmentalprotection

standardsandlescostlytomaintainandoperate.TheGrouphasben,andwilcontinuetobe,selective

inthetypeofaircraftasetstobeincludedinitsportfolio.Asof31December2024,bynumberof

aircraft,90%oftheGroup’sownedflet,bynumberofaircraft,werenarowbodyaircraft,ahighly

liquidasetclasandthemostpopularaircraftypemainlyservingdomesticroutesandshort-haul

flights,whichledrecoveryintheaviationindustryfromthepandemic.

Globalexpansionwithtop-tierclientele

Startingfrom2015,CALChadstartedtoadinternationalesestoitsclientlist.Inrecentyears,the

GroupcontinuedtostrengthenitsleadingpositioninChinamarketwhileactivelyexpandingitsglobal

fotprintwithtop-tierclientstoenhancediversityinthegeographicaldistributionofitscustomerbase.

In2024,withoverseascustomersacountedformorethan30%,theGrouphasucesfulyachievedits

firstcoperationwithglobaltop-tierairlinesuchasLufthansaGroupandCebuPacificAir.Asat31

December2024,bynumberofaircraft,68.6%ofCALC’sownedfletwereleasedtoChineseairlines

customers(includingHongKong,MacauandTaiwan),mostofwhicharestate-ownedairlineswith

financialstrength.Goingforward,globaldiversificationwilremainoneofthefocusesofCALC.In

fact,morethanhalfoftheaircraftscheduledfordeliverybeforeDecember2025havebenleasedto

overseasairlinecustomers.TheimprovementinoveralclientprofileshasdriventheGroup’soveral

rentcolectionratioexceding100%forpasthreyears,reaching101%in2024.TheGrouphasalso

achievedanadjustedrentalyieldof11.6%.

EnhancePortfolioTradingandAsetManagementCapabilities

InJune2018,wecolaboratedwithfourleadingstate-ownedenterprisesasmezanineinvestorstorol

outourglobalaircraftinvestmentvehicle,CAGBermuda1Limited(“CAG”).Withthestablishmentof

CAG,wehavemadegreatstridesinbuildingupourasetmanagementcapabilities.Perfectingour

portfoliotradingandasetmanagementcapabilitiesisinstrumentalinourlongtermstrategyof

increasingourpresenceintheaviationindustrychainasalesorplayingheavieroles,withbroader

businesoportunities.Thisisparticularlyimportantgiventhearth-breakingchangesintheindustry

ecosysteminresponsetothepandemic.Activeportfoliotradesandasetmanagementensuresourflet

portfoliotobeoptimizedwithdiscipline,capitaleficiencyathighlevelsandlowgearingand

strengthensofourcorebusineses.

FolowingthefuloperationofCAG,weroledoutARGCayman1Limited(“ARG”)inDecember2019

togetherwithARIandotherinvestors,anotheraircraftinvestmentvehiclefocusingonmid-ageand

olderaircraftportfoliosprimarilyinthePRCdomesticmarketandtradingofusedpartsandcomponents

disasembly.During2020,weinjectedfouraircraftintoARGwhileitsasociateARIservedasthe

servicertoadvanceitsasetmanagementstrengths.ARGhasucesfulyconcludeditsoperationin

December2024,withalinvestorshavingexitedtheirpositions.

During2020,weinjectedtwoaircraftoajointventurewestablishedwithHNCAviation&

EquipmentLeasingCo.,Ltd.Furthermore,wejoinedforceswithMoutaiFinancialLeasingCo.,Ltd.in

astrategicoperativepartnershipfortheinvestmentinlease-atachedaircraftportfolioinMay2020

andtwoaircrafthadbeninjectedthereinbyJune2023.Wealsocompletedthedisposalofnineaircraft

in2021andfouraircraftin2022,mainlytothird-partylesors,soastosekwin-wincoperationwhere

weoptimiseourfletandasetportfoliowhilethelaterexpandsitsbusinespresence.

In2024,wecompletedthesaleof25ownedaircraftand2managedaircraft,reachingarecordhigh.

Meanwhile,wesucesfulysecuredasetmanagementmandatesforfiveoftheaircraftsold.Wealso

integratedandextendedourglobalaviationpartnershipnetworkandestablishedfirst-timetrading

coperationwith8domesticandoverseaslesorsduring2024.Asat31December2024,thenumberof

ourglobalaircraftradingandasetmanagementpartnershasreachedaproximately30.

Throughthestablishmentofvariousaviationindustryfundplatformsandjointventures,wehave

fosteredindustrialcoperationecosystems,acretingvalueandrealizingreturnsforfinanciers,

investorsandotheraircraftasetownersinourcapacityasanaircraftasetmanager.

Diversifyingourfinancingsourceandcapitaloptimisationtoimproveourcreditratings

Since2018,wehavebenactivelytapingintoboththeonshoreandofshorecapitalmarketsbyisuing

equityandebtinstruments.In2022,weisuedthefirstlow-carbontransitionbondinChina’saviation

industrywithprincipalamountofRMB1bilionatacouponof3.56%,aswelasRMB1.2bilion

corporatebonds.In2023,weisuedthre-yearRMB1.5bilioncorporatebondsatacouponrateof

3.85%andanotherRMB500milioncorporatebondswithacouponrateat3.58%.During2024,we

completedrefinancingofourperpetualcapitalsecuritiestoptimizecapitalstructurewhilefectively

reducingfundingcosts.FolowingthevoluntaryredemptionofthexpensiveUSDperpetualbondsin

December2023andJuly2024,we,inSeptember2024,isuedRMB1bilionperpetualmedium-term

notesinPRCmarkethroughitsubsidiary,CALC(Tianjin),withacouponrateofonly2.7%.In

February2025,CALC(Tianjin)sucesfulyisuedRMB1.5bilion5-yearcorporatebondswithafixed

couponrateof2.38%.

WewilcontinueusingaircraftloansandPDPfinancingtosuportouraircraftacquisitions.Through

theuseofprojectfinancings,wematchouregularloanrepaymentsfortheaircraftloanswithourlease

income,therebygeneratingconstantcashinflowsofleaseincomeandreducingourliquidityrisk.In

October2024,wesecuredourinauguralUS$400milionwarehousefacilityforaircraftfinancing,

whichprovidesenhancedflexibilitytofacilitateouraircraftacquisition,saleandleasing.Thefacility

hadsubsequentlybenupsizedtoUS$700milioninMarch2025withsignificantover-subscriptions.

Wewilcloselymonitorchangesinonshoreandofshoremarketsandbusinesdevelopmentnedsto

selectmarketsandfinancinginstrumentsflexiblywhilecontinuingtoreduceoveralfinancingcosts

throughproactivefinancialmanagement.Wewilalsoactivelyexplorequityorequity-likefinancing

andotherinovativefinancinginstrumentstoimproveourcapitalstrengthandupgradeourinternational

creditrating.

CoperationwithCOMAC

InJanuary2021,theGrouprocuredC909seriesaircraftwith30firmordersand30intendedorders

fromCOMAC,andsignedatripartiteprojectinvestmentcoperationmemorandumwithCELand

COMACinrespectofdepandpragmaticoperationintheareasofoverseasoperationofaircraft

madeinChina,aircraftasetmanagementandaviationaftermarket,etc.

WesucesfulydeliveredaCOMAC909aircraftoIndonesiacarierTransNusainDecember2022,

markingthefirstimeforaChina-maderegionalpasengerjetoentertheoverseasmarket.Itwas

oficialyputintocomercialoperationinApril2023andsucesfulycompleteditsdebutflight,and

laterflewitsfirstinternationalflightinJuly2023.OursecondCOMAC909wasdeliveredto

TransNusainJune2023,steadilypacingupourefortopromotecomercialoperationofChina-made

aircraftinoverseasmarket.In2024,wedeliveredthethirdCOMAC909toTransNusa.InApril2024,

C909basewasopenedinManadoandwelaunchedthredomesticscheduledflightroutesintheastern

Indonesianarchipelago.

WhenChineseaircraftbecomespopularintheglobalaviationmarket,wewilenjoytheupsidebybeing

thefirstmoverinleasingandexportingChineseaircraftoverseas.

RECENTDEVELOPMENTS

Acquisitionoftwoaircraft

On21January2025,we(throughourwholy-ownedsubsidiary,asbuyer)enteredintoaircraftsaleand

purchaseagrementswithtwowholy-ownedsubsidiariesofCindaFinancialLeasingCo.,Ltd(an

independenthirdparty)inrelationtotheacquisitionoftwoBoeingB737-800aircraft.Thetransactions

arexpectedtobecompletedbyendofAugust2025.

Onshoreisuance

InFebruary2025,CALC(Tianjin)isued5-yearonshorecorporatebondsofRMB1.5bilionwith

couponrateof2.38%.

InApril2025,CALC(Tianjin)isuedperpetualonshoremedium-termnotesofRMB500milionwith

couponrateof2.48%.

UpsizeofWarehouseFacilityfromUS$400miliontoUS$700milion

On12March2025,wesucesfulyupsizedourinauguralwarehousefacilitytoUS$700milion.The

expandedfacilitywasubstantialyoversubscribed,withtotalcomitmentsmorethandoublingthe

targetedacordionamount.Thesyndicatecomprisesadiversegroupof16banksacrosChina,Europe,

andotherAsianmarkets,bringingthetotalnumberoflenders(includingthe4MandatedLeadBanks)to

20.

Portfoliotrade–Saleofsixlease-atachedaircraft

On13March2025,inordertoenhancetheGroup’screditprofileandpursuelong-termsustainable

growth,awholy-ownedspecialpurposevehicleoftheGroup(theSeler)enteredintotheAircraft

PortfolioandAsetSaleandPurchaseAgrementwithawholy-ownedindirectsubsidiaryofDubai

AerospaceEnterprise(DAE)Ltd,anindependenthirdparty,(thePurchaser)inrelationtothesaleof

sixleased-atachedaircraft(twoAirbusA320NEOaircraftandfourAirbusA321NEOaircraftwith

lease-atached).ThesaletransactionsarexpectedtobecompletedbythendofOctober2026.

Saleofoneaircraft

On15April2025,awholy-ownedspecialpurposevehicleoftheGuarantor(theSeler)enteredintothe

AircraftSaleandPurchaseAgrementwithNEOSKYAIRCRAFTANDREQUISITESCHARTERING

DWC-LC(theBuyer),pursuantowhichtheSeleragredtoselandtheBuyeragredtopurchase

oneBoeing737-800aircraft.ThisaletransactionwilincreasetheGroup’sincomefromaircraft

trading,satisfythemarket’sdemandforaircraftandmaintainthegodrelationshipbetwentheGroup

anditsclients.

SUMARYOFTHEOFERING

ThefolowingisabriefsumaryofthetermsoftheoferingoftheBondsandisqualifiedinitsentirety

bytheremainderofthisOferingCircular.ForamorecompletedescriptionoftheTermsandConditions

oftheBonds,se“TermsandConditionsoftheBonds”and“SumaryofProvisionsRelatingtothe

BondsinGlobalForm”.Someofthetermsdescribedbelowaresubjectoimportantlimitationsand

exceptions.Definedtermsusedinthisumaryshalhavethemeaningsgiventothemin“Termsand

ConditionsoftheBonds”.

Isuer

CALCBondsLimited

Guarantor

ChinaAircraftLeasingGroupHoldingsLimited

Guarante

TheGuarantorwilunconditionalyandirevocablyguarante

theduepaymentofalsumsexpresedtobepayablebythe

IsuerundertheTrustDedandtheBonds,asfurther

describedinCondition3oftheBonds.

Isue

U.S.$160,000,000inagregateprincipalamountof6.0per

cent.guarantedbondsdue2028

IsuePrice

100.0percent.oftheprincipalamountoftheBonds

FormandDenomination

TheBondswilberegisteredandisuedinthespecified

denominationofU.S.$200,000andintegralmultiplesof

U.S.$1,000inexcesthereof.

Interest

TheBondswilbearinterestfromandincluding14August

2025atherateof6.0percent.peranum,payable

semi-anualyinarearinequalinstalmentsofU.S.$30.0per

CalculationAmount(asdefinedintheTermsandConditions

oftheBonds)on14Februaryand14Augustineachyear,

comencingon14February2026.

IsueDate

14August2025

MaturityDate

14August2028

StatusoftheBonds

TheBondswilconstitutedirectunsubordinated,

unconditionaland(subjectoCondition4oftheTermsand

ConditionsoftheBonds)unsecuredobligationsoftheIsuer

andshalataltimesrankparipasuandwithoutany

preferenceamongthemselves.Thepaymentobligationsofthe

IsuerundertheBondshal,saveforsuchexceptionsasmay

beprovidedbyaplicablelawandsubjectoCondition4(a)of

theTermsandConditionsoftheBonds,ataltimesrankat

leastequalywithaltheIsuer’sotherpresentandfuture

unsecuredandunsubordinatedobligations.

StatusoftheGuarante

TheobligationsoftheGuarantorundertheGuaranteshal,

saveforsuchexceptionsasmaybeprovidedbyaplicablelaw

andsubjectoCondition4(a)oftheTermsandConditionsof

theBonds,ataltimesrankatleastequalywithalthe

Guarantor’sotherpresentandfutureunsecuredand

unsubordinatedobligations.

NegativePledge

TheBondscontainanegativepledgeprovisionasfurther

describedinCondition4(a)oftheTermsandConditionsofthe

Bonds.

EventsofDefault

TheBondscontaincertaineventsofdefaultprovisionsas

furtherdescribedinCondition9oftheTermsandConditions

oftheBonds.

Taxation

Alpaymentsofprincipal,premium(ifany)andinterestbyor

onbehalfoftheIsuerortheGuarantorinrespectoftheBonds

orundertheGuarante(asthecasemaybe)shalbemadefre

andclearof,andwithoutset-oforcounterclaimandwithout

witholdingordeductionfororonacountof,anypresentor

futuretaxes,duties,asesmentsorgovernmentalchargesof

whatevernatureimposed,levied,colected,witheldor

asesedbyorwithintheBritishVirginIslands,theCayman

Islands,HongKongorthePRCor,ineachcase,anyauthority

thereinorthereofhavingpowertotax,unlesuch

witholdingordeductionisrequiredbylaw.

WheresuchwitholdingordeductionismadebytheIsueror,

asthecasemaybe,theGuarantorbyorwithinthePRCata

rateuptoandincludingtheagregaterateaplicableon11

August2025(the“AplicableRate”),theIsuerorthe

Guarantor(asthecasemaybe)wilincreasetheamountspaid

byitothextentrequired,sothathenetamountreceivedby

theBondholdersequalstheamountswhichwouldotherwise

havebenreceivablebythemhadnosuchwitholdingor

deductionbenrequired.

IftheIsuerortheGuarantor,asthecasemaybe,isrequired

tomakeadeductionorwitholding(i)byorwithinthePRCin

excesoftheAplicableRate,or(i)bytheBritishVirgin

Islands,theCaymanIslandsorHongKong,theIsuerorthe

Guarantor,asthecasemaybe,shalpaysuchaditional

amounts(“AditionalTaxAmounts”)aswilresultinreceipt

bytheBondholdersofsuchamountsaswouldhaveben

receivedbythemhadnosuchwitholdingordeductionben

required,exceptasdescribedinCondition8oftheTermsand

ConditionsoftheBonds.

FinalRedemption

Unlespreviouslyredemed,orpurchasedandcanceled,the

Bondswilberedemedatheirprincipalamountonthe

MaturityDate.TheBondsmaynotberedemedatheoption

oftheIsuerotherthaninacordancewithCondition6ofthe

TermsandConditionsoftheBonds.

RedemptionforTaxationReasons

TheBondsmayberedemedatheoptionoftheIsuerin

whole,butnotinpart,atanytime,ongivingnotlesthan30

normorethan60days’noticetotheBondholdersin

acordancewithCondition16oftheTermsandConditionsof

theBonds(whichnoticeshalbeirevocable)andinwritingto

theTrusteandthePrincipalPayingAgent,atheirprincipal

amountogetherwithinterestacruedtothedatefixedfor

redemption,if(i)theIsuer(or,iftheGuarantewascaled,

theGuarantor)hasorwilbecomeobligedtopayAditional

TaxAmountsasprovidedoreferedtoinCondition8ofthe

TermsandConditionsoftheBondsasaresultofanychange

in,oramendmento,thelawsoregulationsoftheBritish

VirginIslands,theCaymanIslands,HongKongorthePRC,

or,ineachcase,anypoliticalsubdivisionoranyauthority

thereoforthereinhavingpowertotax,oranychangeinthe

aplicationoroficialinterpretationofsuchlawsor

regulations(includingbutnotlimitedtoanydecisionbya

courtofcompetentjurisdiction),whichchangeoramendment

becomesefectiveonorafter11August2025,and(i)such

obligationcanotbeavoidedbytheIsuer(ortheGuarantor,

asthecasemaybe)takingreasonablemeasuresavailabletoit,

providedthatnosuchnoticeofredemptionshalbegiven

earlierthan90dayspriortothearliestdateonwhichthe

Isuer(ortheGuarantor,asthecasemaybe)wouldbeobliged

topaysuchAditionalTaxAmountswereapaymentinrespect

oftheBonds(ortheGuarante,asthecasemaybe)thendue,

asfurtherdescribedinCondition6(b)oftheTermsand

ConditionsoftheBonds.

RedemptionforChangeofControl

AtanytimefolowingtheocurenceofaChangeofControl,

theholderofanyBondwilhavetheright,atsucholder’s

option,torequiretheIsuertoredemal,butnotsomeonly,

ofthatholder’sBondsontheChangeofControlPut

SetlementDate(asdefinedinCondition6(c)oftheTermsand

ConditionsoftheBonds)ataredemptionpricequalto101

percent.oftheirprincipalamount,togetherwithacrued

interestobutexcludingsuchChangeofControlPut

SetlementDate.Se“TermsandConditionsoftheBonds–

RedemptionandPurchase–RedemptionforChangeof

Control”.

ClearingSystems

TheBondswilbeisuedinregisteredformandrepresented

initialybybeneficialinterestsintheGlobalCertificate,which

wilberegisteredinthenameofanomineof,andeposited

ontheIsueDatewith,acomondepositaryforEuroclearand

Clearstream.BeneficialinterestsintheGlobalCertificatewil

beshownon,andtransfersthereofwilbefectedonly

through,recordsmaintainedbyEuroclearandClearstream.

ExceptasdescribedintheGlobalCertificateandthisOfering

Circular,certificatesfortheBondswilnotbeisuedin

exchangeforbeneficialinterestsintheGlobalCertificate.

ClearanceandSetlement

TheBondshavebenaceptedforclearancethroughEuroclear

andClearstreamunderComonCodenumber314719409and

theInternationalSecuritiesIdentificationNumberforthe

BondsisXS3147194099.

GoverningLaw

Englishlaw.

Truste

CNCBITrusteLimited

PrincipalPayingAgent

ChinaCITICBankInternationalLimited

TransferAgentandRegistrar

ChinaCITICBankInternationalLimited

FurtherIsues

TheIsuermayfromtimetotimewithoutheconsentofthe

Bondholderscreateandisuefurtherbondseitherhavingthe

sametermsandconditionsastheBondsinalrespectsorinal

respectsexceptfortheisuedateandthefirstpaymentof

interestonthem,andsothatsuchfurtherisueshalbe

consolidatedandformasingleserieswiththeoutstanding

Bonds,asfurtherdescribedinCondition15oftheTermsand

ConditionsoftheBonds.

UseofProceds

Se“UseofProceds”.

RiskFactors

Foradiscusionofcertainriskfactorsthatshouldbe

consideredinevaluatinganinvestmentintheBonds,se“Risk

Factors”.

Listing

AplicationwilbemadetotheHongKongStockExchange

forthelistingof,andpermisiontodealin,theBondsbyway

ofdebtisuestoProfesionalInvestorsonlyandsuch

permisionisexpectedtobecomefectiveonorabout15

August2025.

SelingRestrictions

TheBondswilnotberegisteredundertheSecuritiesActor

underanystatesecuritieslawsoftheUnitedStatesandwilbe

subjectocustomaryrestrictionsontransferandresale.Se

“SubscriptionandSale”.

Guarantor’sCorporateRatings

TheGuarantoreceivedacorporateratingofan

investment-gradeinternationalratingof“Ag-”withastable

outlokfromChinaChengxin.TheBondsandtheGuarante

havenotbenrated.Aratingisnotarecomendationtobuy,

selorholdsecuritiesandmaybesubjectorevision,

qualification,suspension,reductionorwithdrawalatanytime

bytheasigningratingagency.Asuspension,reductionor

withdrawaloftheratingasignedtotheGuarantormay

adverselyafecthemarketpriceoftheBonds.

SUMARYCONSOLIDATEDFINANCIALINFORMATION

OFTHEGUARANTOR

Thesumaryauditedconsolidatedfinancialinformationasatandfortheyearsended31December

2022,2023and2024setforthbelowisderivedfromtheAuditedConsolidatedFinancialStatements,

whichareincludedelsewhereinthisOferingCircular.The2023AuditedConsolidatedFinancial

StatementswereauditedbyPwCinacordancewithHongKongStandardsonAuditingisuedbythe

HongKongInstituteofCertifiedPublicAcountantsandthe2024AuditedConsolidatedFinancial

StatementswereauditedbyDeloite.TheAuditedConsolidatedFinancialStatementswerepreparedand

presentedinacordancewithHKFRS.

Theinformationsetoutbelowshouldbereadinconjunctionwiththerelevantconsolidatedfinancial

statementsoftheGuarantor,includingthenotesthereto,includedelsewhereinthisOferingCircular.

HistoricalresultsoftheGrouparenotnecesarilyindicativeofresultsthatmaybeachievedforany

futureperiod.

SumaryConsolidatedStatementofIncomeInformation

Yearended31December

(AuditedHK$’000)

Totalrevenue

Leaseincome

Financeleaseincome.574,683600,996608,828

Operatingleaseincome.2,967,5653,598,2073,740,861

3,542,2484,199,2034,349,689

Otheroperatingincome

Netincomefromaircraftransactionsandaircraft

componentstrading.207,072124,501212,714

Otherincome.421,682439,993641,360

628,754564,494854,074

4,171,0024,763,6975,203,763

Expenses

Interestexpenses.(1,610,507)(2,244,481)(2,710,584)

Depreciationandimpairment.(1,356,612)(1,618,823)(1,686,569)

(Expectedcreditloses)/reversalofexpectedcredit

loses.(83,355)(51,038)71,211

Otheroperatingexpenses.(345,335)(341,044)(550,044)

(3,395,809)(4,255,386)(4,875,986)

Netwrite-ofofaircraftremainedinRusia.(439,029)–

CompensationreceivedfromaircraftremainedinRusia.–185,384–

Shareofresultsfromasociatesandjointventures.2,682(389)160

Othergains/(loses),net.184,619(179,571)313,325

Profitbeforeincometax.523,465513,735641,262

Incometaxexpenses.(307,781)(293,578)(315,653)

Profitfortheyear.215,684220,157325,609

Profitatributableto:

ShareholdersoftheCompany.73,59828,256257,545

Holdersofperpetualcapitalsecuritiesandother

non-controlinginterests.142,086191,90168,064

215,684220,157325,609

Earningspershareforprofitatributableto

shareholdersoftheCompany(expresedinHK$

pershare)

–Basicearningspershare.0.0990.0380.346

–Dilutedearningspershare.0.0990.0380.346

SumaryConsolidatedBalanceShetInformation

Asat31December

(AuditedHK$’000)

ASETS

Property,plantandequipmentandright-of-useasets.27,354,37333,493,82628,860,008

Pre-DeliveryPayments(“PDP”)andotherprepayments

andreceivablesrelatingtoaircraftacquisition.10,445,4307,626,2747,855,333

Investmentsinandloanstoasociatesandjointventures.1,354,4101,529,629491,697

Financeleasereceivables–net.8,172,0868,577,3399,185,457

Deferedincometaxasets.–36,058

Financialasetsatfairvaluethroughprofitorlos.769,462621,7491,476,076

Prepaymentsandotherasets.916,985647,166683,835

Asetsclasifiedasheldforsale.1,425,1991,425,2545,555,238

Aircraftcomponentstradingasets.5,2451,9343,177

Derivativefinancialasets.221,39961,15713,381

Restrictedcash.1,114,958544,524301,110

Cashandcashequivalents.3,552,5335,295,8753,778,318

Totalasets.55,332,08059,824,72758,239,688

EQUITY.

Sharecapital.74,43674,43674,465

Reserves.2,314,6132,173,5441,986,750

Retainedearnings.2,276,2472,081,5602,168,242

EquityatributabletoshareholdersoftheCompany.4,665,2964,329,5404,229,457

Perpetualcapitalsecuritiesandothernon-controling

interests.1,590,921810,4221,098,740

Totalequity.6,256,2175,139,9625,328,197

LIABILITIES

Deferedincometaxliabilities.1,057,0591,191,4791,303,752

Borowings.38,001,15042,911,87043,046,205

Medium-termnotes.1,696,5091,656,1731,599,726

Bondsandebentures.5,406,4905,943,4993,930,722

Derivativefinancialiabilities.52,543147,735233,712

Incometaxpayables.45,85066,056133,162

Interestpayables.297,689392,690292,538

Otherliabilitiesandacruals.2,518,5732,375,2632,371,674

Totaliabilities.49,075,86354,684,76552,911,491

Totalequityandliabilities.55,332,08059,824,72758,239,688

Non-GAPFinancialMeasures

Asatandfortheyearended31December

(HK$milion,exceptforatiosandpercentages)

EBITDA

(1)

.3,490.64,377.05,038.4

Interestcoverage

(2)

.216.7%195.0%185.9%

Gearingratio

(3)

.81.5%84.4%83.4%

Notes:

1.EBITDAforanyperiodconsistsofearningsbeforeinterestexpenses,depreciationandincometaxexpenses.EBITDAis

notastandardmeasureunderHKFRS.EBITDAisawidelyusedfinancialindicatorofacompany’sabilitytoserviceand

incurdebt.EBITDAshouldnotbeconsideredinisolationorconstruedasanalternativetocashflows,netincomeorany

othermeasureofinancialperformanceorasanindicatorofouroperatingperformance,liquidity,profitabilityorcash

flowsgeneratedbyoperating,investingorfinancingactivities.EBITDAdoesnotacountfortaxes,depreciationorinterest

expenses.InevaluatingEBITDA,investorshouldconsider,amongotherthings,thecomponentsofEBITDAsuchasales

andoperatingexpensesandtheamountbywhichEBITDAexcedscapitalexpendituresandothercharges.EBITDAhas

benincludedbecausetheGroupbelieveitisausefulsuplementocashflowdatasameasureofitsperformanceandits

abilitytogeneratecashflowfromoperationstocoverdebtserviceandtaxes.EBITDApresentedhereinmaynotbe

comparabletosimilarlytitledmeasurespresentedbyothercompanies.InvestorshouldnotcompareourEBITDAto

EBITDApresentedbyothercompaniesbecausenotalcompaniesusethesamedefinition.

2.InterestcoverageiscalculatedbydividingEBITDAbyinterestexpenses.

3.Gearingratioiscalculatedbydividingtotalinterest-bearingdebtsbytotalasets.Totalinterest-bearingdebtsconsistof

borowings,medium-termnotes,bondsandebentures.

RISKFACTORS

Priortomakinganyinvestmentdecision,prospectiveinvestorshouldconsidercarefulyalofthe

informationcontainedinthisOferingCircular,includingtherisksanduncertaintiesdescribedbelow.

Ourbusines,financialconditionoresultsofoperationscouldbematerialyadverselyafectedbyany

oftheserisks.Factorswhichwebelievemaybematerialforthepurposeofasesingthemarketrisks

asociatedwiththeBondsarealsodescribedbelow.Webelievethathefactorsdescribedbelow

representheprincipalrisksinherentininvestingintheBonds,butourinabilitytofulfilourespective

obligationsundertheBondsandtheGuarantemayocurforothereasonsandwedonotrepresent

thathestatementsbelowregardingtherisksofinvestmentintheBondsarexhaustive.Aditional

considerationsanduncertaintiesnotpresentlyknowntousorwhichtheycurentlydemimaterial

mayalsohaveanadversefectonaninvestmentintheBonds.Alofthesefactorsarecontingencies

whichmayormaynotocurandwearenotinapositiontoexpresaviewonthelikelihodofanysuch

contingencyocuring.ThemarketpriceoftheBondscouldeclineduetoanyoftheserisks,and

investorsmaylosepartoraloftheirinvestment.

ThisOferingCircularalsocontainsforward-lokingstatementsthatinvolverisksanduncertainties.

Ouractualresultscouldifermaterialyfromthoseanticipatedintheseforward-lokingstatementsas

aresultofcertainfactors,includingtherisksdescribedbelowandelsewhereinthisOferingCircular.

RISKSRELATINGTOURBUSINESANDTHEAIRCRAFTLEASINGINDUSTRY

Ourbusinesisensitivetoglobaleconomiconditions.Asevereorprolongedownturnintheglobal

economybroughtbyothergeneralmacroeconomiconditionsmayhaveamaterialadversefecton

ourbusines,financialcondition,resultsofoperationsandprospects.

Thecontinuedsucesandprofitabilityofourbusinesdepend,inpart,onglobaleconomicgrowthand

demandforitservices.Thedemandforthevariouservicesoferedbyusisubjectodiferentmarket

cyclespecifictosuchservices,whichinturnareafectedbychangesordevelopmentsinglobal

economicandfinancialconditionsthatarebeyondourcontrol.

Since2020,thegeneraleconomicoutlokinmajoreconomiesuchEurope,theUnitedStates,Japan

andthePRChasremainedchalengingivenlowerglobaleconomicgrowthprospects,higher

governmentfiscaldeficitsandpublicdebtandcontinuedinflationarypresure.Inparticular,thelatest

escalatingtradedisputeandtradetarifsin2025betwentheUnitedStatesandothermajoreconomics

couldresultinsignificantadverseimpacts,includingaslowdowninglobaleconomicgrowthandhigher

inflation,reducedtradeflowsandbusinesinvestmentandownsiderisksforequity,bondand

comodityprices.Moreover,theongoingpoliticalgridlockintheUnitedStatesovergovernment

spendingandebtlevels,theconflictbetwenRusiandUkraineandthefectiveconomicsanctions

onRusia,thegeopoliticaltensionsandconflictsinvariouscountriesintheMidleEastincludingthe

Israeli-PalestinianandtheIsraeli–Iranconflictandtheimpactofclimaterisksduetoglobalwarming

mayalsoresultinaditionaladverseimpactstotheglobaleconomyandmarketsandtradeflows.Such

geopoliticalrisksmayhaveamaterialadverseimpactonmacroeconomicfactorswhichafecthe

Group’sbusines,financialcondition,resultsofoperationsandprospects.

Inadition,centralbanksofsomecountries,includingtheFederalReserveBoardofGovernorsofthe

UnitedStates,havealsoaceleratedtheirshiftsinmonetarypoliciesandincreasedinterestrates.There

canbenoasurancethatmonetaryandfiscalpolicymeasuresadoptedbycentralbanksornational

governmentswilhavetheintendedefectsorthataglobaleconomicdownturnwilnotocurormarket

volatilitieswilnotpersist.

DeliveriesofnewaircraftbybothAirbusandBoeinghavealsobenafectedbyindustrialconstraints

andsuplychainlimitationsandtherecanbenoasurancethatheycansucesfulymaintaintimely

deliveriesofouraircraftorderstous.Anydelayorotherobstaclethatheyencounterinaircraft

productionorinregulatorycertificationmayinturndelaydeliveryofsuchaircraftous.Anydelaysin

receivingaircraftdeliverieswouldadverselyafectourabilitytotimelygeneraterevenuefromsuch

aircraft.

Otherexternalfactors,includingbutnotlimitedto:

•global,regionalorcountryspecificpoliticalinstability,socialunrestandcivilwar,includingbut

notlimitedtotherecentmilitaryconflictsbetwenRusiandUkraine,IsraelandPalestine,Israel

andIran,andtheresultingprolongedairspacerestrictions;

•volatilityininterestrates;

•economic,tradeandpoliticalpolicies,includingtradefrictioninvolvingmajoreconomiesuchas

theUnitedStates,theEUandChina;

•sudenincreasesininflationordeflation;

•oilorothercomoditymarketvolatility,whichmayafectdemandforfuel-eficientaircraftand

equipment;and

•anyothersudendownturnorsudenchangeintheglobal,regionalorlocaleconomic,political,

social,legal,environmentorgovernmentpolicies(suchasBrexit,theSino-UStradewarandany

localpoliticalturmoilorcivildisobediencemovements),laws,rulesoregulations,theimposition

oftradetarifsandnon-tarifstradebariers,sanctions,boycots,tradeandlabourdisputesand

workstopages,particularlyintheaircraftindustry,

whichareventsbeyondourcontrol,andtherecurenceofadversemacroeconomiconditionsare

expectedtohaveamaterialadversefectonourbusines,financialcondition,resultsofoperationsand

prospects.

Traderestrictionsandtradefrictioncouldmaterialyafectheairlineandaircraftmanufacturing

industries,whichinturncouldadverselyafectourbusinesandabilitytoprocureaircraftina

timelyandcost-efectivemaner.

Wearesubjectorisksrelatingtochangesintradepolicies,tarifregulations,embargoesorothertrade

restrictionsadversetotheairlineandaircraftmanufacturingindustriesgeneraly.Anytraderestrictions,

tradefrictionortravelbanscouldmaterialyandadverselyafecthebusinesesofourairlinecustomers

andtheirdemandforaircraftfromus,aswelasourabilitytoprocureaircraftinatimelyand

cost-efectivemaner.Inparticular,inrecentmonths,theU.S.administrationhasindicatedand

demonstrateditsintentoalteritsaproachtointernationaltradepolicythrough,amongotherthings,

imposingtarifsonawiderangeofproductsandothergodsfrom,China,membersoftheEU,

countriesintheMidleEastandAfricandothercountries.Thesemeasureshaveledtothercountries,

includingthosetargetedbytheU.S.tarifs,toenactheirowntarifsagainstimportedgodsfromthe

U.S.inretaliation.Tradefrictionmaycontinuetoescalateinthefutureandmayresultinsubstantial

aditionalorincreasedtarifsoncertaintypesofgods,suchasaircraftandaircraftcomponents,

makingitsignificantlymoredificultandexpensivetoimportsuchgodsintocertainjurisdictions.Asa

resultofthesetarifs,aircraftmanufacturersmayexperiencedelaysorincreasedcostsinproducingand

deliveringaircraft,whichtheymaypasontousorwhichwemayhavetopaydirectly,andweinturn

maynedtopasonanysuchdelaysorincreasedcostsontourcustomers,whichwemaynotbeable

todoncomercialyaceptabletermsoratal.Inadition,tradefrictionandchangesintradepolicies

mayadverselyimpactairlinedemandforleasedaircraftwhichmayadverselyimpactourabilitytoplace

aircraftonleaseintheafectedcountries,oradverselyimpacthecostofandthereturnswereceive

fromsuchleaseplacements.Whilethetarifnegotiationistilongoing,wecanotpredictfuturetrade

policiesortarifs,oranyretaliatorymeasuresinresponse,whichmaybenacted,oranychangesin

demandwhichmaybeconectedtotheforegoing,andanysuchdevelopmentswhichnegativelyimpact

theairlineandaircraftmanufacturingindustryorairlinedemandmayinturnhaveamaterialadverse

efectonourbusines,financialcondition,resultsofoperationsandprospects.

Extraneousevents,suchasteroristatacks,majorairtravelacidentsortheoutbreakofcontagious

diseases,couldreducethedemandforairtravel,whichcouldcauseourairlinecustomersnotbeing

abletometheleasepaymentobligation.

Theprimaryefectsexperiencedbyairlineindustryincludeincreasedoperatingcosts,increased

concernsaboutfutureteroristatacks,decreasedairtrafic,airportshutdowns,andflightcancelation

andelays.Teroristatacks,orthefearofsuchatacks,orotherworldeventsormajorairtravel

acidentscouldresultindecreasedairtraficandcouldalsoincreasethecostofairlineoperators,which

couldadverselyafectourbusinesandfinancialcondition.

AnyoutbreakofcomunicablediseasesincludingwithoutlimitationtheglobalCOVID-19pandemic

mayadverselyafectpasengerdemandforairtravel.AditionaloutbreaksofSARS,birdflu,swineflu,

H7N9virusorotherpandemicdiseases,orthefearofsuchsevereacuterespiratorysyndrome,orevents,

couldprovokeunpredictableresponses,includingovernment-imposedtravelrestrictionsandborder

closures,whichcouldalsonegativelyafectpasengerdemandforairtravel.Theseconsequencescould

adverselyafectourairlinecustomers’liabilitytosatisfytheirleasepaymentobligations,whichcould

adverselyafectouroperatingresultsandfinancialcondition.

Ourliabilitiesandourbusinesarexposedtoforeignexchangeraterisks.

WehaveoperationsinthePRCandHongKong,andcertainportionofcashandcashequivalents,

restrictedcash,financialasetsincludingfinancialeasereceivables,prepaymentsandotherasets,

financialiabilitiesincludingbankborowings,medium-termnotes,bondsandebenturesandother

liabilitiesandacrualsaredenominatedincurenciesotherthanthefunctionalcurencyofourGroup

entities.Forinstance,aircraftleasingincomeandcertainborowingsusedtofinancetheleasesare

denominatedinUSD,whilesomeborowingsaredenominatedinRMB.Curencyexchangerisksmay

arisewhenfinanceleasereceivables,operatingleasereceivablesandcertainborowingsare

denominatedindiferentcurencies,andwheretherearefluctuationsinthexchangeratesofsuch

curenciesagainstotherforeigncurencies.Althoughwehaverecordedcurencyexchangegainsin

RMBofHK$381.9milionandcurencyexchangegainsinUSDofHK$67.6milion,eachfortheyear

ended31December2024,ifthexchangeratescontinuetofluctuateandwecanotprocureanyspecific

foreignexchangecontrolarangementstomitigatesuchrisks,ouresultsofoperationsandfinancial

performancemaybeadverselyafected.

AlthoughtheGroupcloselymonitorscurencyexchangerisksandhedgesthexposurewherenecesary

andapropriate,itshedgingactivitiesmaynotbefulyefective.Futuremovementsinthexchangerate

oftheRMBorHongKongdolarsagainstheU.S.dolarmayresultinforeignexchangelosesorloses

onitshedginginstruments,whichmayadverselyafectitsresultsofoperationsandfinancialcondition.

Wefacetheriskofdecreaseinaircraftvalue,impairmentofournon-financialasetsand

marked-to-marketfinancialasets.

Non-financialasetsareperiodicalyreviewedforimpairmentandwherethecaryingamountofan

asetisgreaterthanitsestimatedrecoverableamount,itiswritendownimediatelytoitsrecoverable

amount.Therecoverableamountisthehigheroftheaset’sfairvaluelescoststoselandvalueinuse.

Factorsthatmaycontributetoimpairmentofaircraftinclude,butarenotlimitedto,unfavourableairline

industrytrendsafectingtheresidualvaluesofcertainaircraftypes,highfuelpricesandevelopment

ofmorefuel-eficientaircraftshorteningtheusefulivesofcertainaircraft,andnewtechnological

developments.TheGroupobtainsfairvaluesofaircraftfromindependentapraisersforwhichthe

principalasumptionsunderlyingaircraftvaluearebasedoncurentmarketransactionsforsimilar

aircraftinasimilarconditionandindustrytrends.Whenestimatingthevalueinuseofaircraft,the

Groupestimatesexpectedfuturecashflowsfromtheaircraftbasedonthekeyasumptionsmainly

includingleaserentsofcurentleases;subsequentreleaseratesbasedoncurentmarketinginformation

andresidualvalues,andiscountedataratecomensuratewiththeasociatedrisktocalculatethe

presentvalue.Wefacetheriskofwrite-downinthevalueofouraircraftasetsinthefuture,whichmay

inturnadverselyimpactourbusinesandfinancialperformance.CertainfinancialasetsoftheGroup

arerequiredtobemarked-to-market.Intheventhathemark-to-marketvalueislesthanthecarying

amount,ourfinancialperformancemaybeadverselyafected.

Oursubstantialindebtednesexposesustoliquidityandre-financingrisks.

Werelyoncashgeneratedfromourbusinesoperations,aircraftloans,PDPfinancing,debtandequity

financingandotheraircraftfinancingandtradingchanelstofinancetheaircraftacquisitionsand

businesoperation.Wexpecthatwewilcontinuetodosointhefuture.Se“Descriptionofthe

Group–OurGrowthStrategies–Diversifyingourfinancingsourceandcapitaloptimizationtoimprove

ourcreditratings”.

Ourtotalborowings(includingborowings,medium-termnotes,bondsandebentures)were

HK$45,104.1milion,HK$50,511.5milionandHK$48,576.7milionasat31December2022,2023

and2024,respectively,representing81.5%,84.4%and83.4%ofourtotalasetsasat31December

2022,2023and2024,respectively.

Duetothecapital-intensivenatureofourbusines,thenedtorefinancematuringdebtandourstrategy

ofexpandingouraircraftportfolio,wexpecthatwewilcontinuetoincursignificantindebtednesin

thefutureandmaintainhighlevelsofindebtednes,which:

•maycauseasubstantialportionofourcashflowsfromoperationstobededicatedtointerestand

principalpaymentsandthereforeisnotavailabletofundouroperations,workingcapital,capital

expenditures,expansion,acquisitionsorgeneralcorporateorotherpurposes;

•mayimpairourabilitytobtainaditionalfinancinginthefuture;

•maylimitourflexibilityinplaningfor,oreactingto,changesinourbusinesandindustry;

•maymakeusmorevulnerabletodownturnsinourbusines,ourindustryortheconomyin

general;

•mayrestrictusfrompursuingstrategicbusinesoportunities;and

•mayincreaseourexposuretointerestratefluctuations.

Asat31December2022,2023and2024,ourcurentliabilitiesexcededourcurentasetsby

HK$12,676.7milion,HK$12,805.3milionandHK$4,983.7milion,respectively.

Asat31December2024,thecurentliabilitiesmainlycomprisedborowingsofHK$12,732.7milion

(HK$4.8bilionfromaircraftacquisitionfinancing(“aircraftloans”),HK$2.7bilionfromPDP

financingandotherborowingsofHK$5.2bilionwerethemajorcomponents)andbondsand

debenturesofHK$1,542.9milion.Therepaymentofaircraftloanswilbepartialyfundedbythe

colectionofoperatingleasereceivablesthatisexpectedtobereceivedfromairlineswithin12months

from31December2024(buthasnotbenincludedundercurentasets).RepaymentofPDPfinancing

andotherfinancingsisexpectedtobefundedbyexistingloanfacilitiesand/ornewaircraftloanswhen

aircraftaredelivered.Thebonds,debenturesandmedium-termnotesaretargetedtoberepaidbyour

internalresourcesand/oraditionalfundingtoberaisedbytheGroup.TheGroupwilkeponraising

fundsthroughPDPfinancing,aircraftloans,bondisuance,otherdebtcapitalmarketfinancing,

equity/equity-likefinancingandisposalofaircraft.

Wecanotasureyouthatwewilalwaysbeabletocontinuetobtaintherequiredfinancinginthe

futureorthatwewouldbeabletoarangefore-financingofourindebtedneswhentheybecomedue,

repayourindebtednesoraisethenecesaryfundingtofinanceourbusinesgrowthandourcapital

comitments.

Furthermore,wecanotasureyouthatwewilbeabletocomplywithaltherequirementsor

covenantsunderourfinancingagrementsorothermaterialcontractsenteredintoaspartofour

ordinarycourseofbusinesorthatwewilbeabletobtainanywaiverifwefailtocomplywiththem.

Wehavenotreceived,duringthethreyearsended31December2022,2023and2024,anynoticeof

breachofanycovenantorundertakingresultinginearlyterminationormodificationofanycontractsor

agrementswhicharematerialtourbusines.

Ifweviolateanyoftheundertakingsorcovenants,itcouldresultinincreaseintheinterestrates,

aceleratedrepaymentofloansandinterest,terminationordelayintherelevantarangementsorlegal

procedingsagainstus.Anyoftheseincidentscouldhaveamaterialadversefectonourbusines,

operatingresults,andfinancialcondition.Furthermore,ourliquiditydependsontheamountofcash

generatedfromouroperationsandouracestofurtherfinancialresources,whichcouldalsobeinturn

afectedbyourfutureoperatingperformance,prevailingeconomiconditions,andotherfactorsoutside

ourcontrol.

Wemaynotbeabletocolectouroutstandingloansfromourdebtors.

Asat31December2024,theGroup’scaryingamountofoutstandingloantoAircraftRecycling

InternationalLimited(“ARI”)amountedtoHK$243.2milion.On27October2023,ARIandits

shareholdersenteredintothefourthsuplementalshareholders’loanandguaranteagrement(the

“FourthSuplementalAgrement”),pursuantowhichthetermoftheshareholders’loanand

guarantewasextendedto31December2026andtheanualcapwasreducedfromHK$1.5bilionto

HK$650milion.Inadition,wehaventeredintoanexchangeablebondsubscriptionagrementwith

ARIinrespectofthesubscriptionofHK$850milionexchangeablebondstobeisuedbyARI.On1

January2024,wehadcompletedthesubscriptionofthexchangeablebondsandtheconsiderationwere

setledagainstheshareholders’loantoARI.Thexchangeablebondsarebearinginterestat0.5%per

anumabovetheprimelendingratequotedbytheBankofChina(HongKong)Limitedwhichis

acruedailyandpayableinarearsofsixmonthlyintervalsfromthedateofisueofthexchangeable

bonds.IntheventhatARIcontinuestoincurloses,thereisnoguarantethatheoutstandingloan

amountstouscanberepaidinatimelymanerandouresultsofoperationsandfinancialperformance

maybeadverselyafected.

Werequireasignificantamountofinancingtosuportouraircraftpurchasecomitment.

Werequiretoarangefundingforeachofouraircraftacquisitionsthroughpurchaseandleaseback

transactionsordirectaircraftpurchases.HencewemaysekPDPfinancinguponaircraftpurchasesand

priortotheirdeliveries;aswelasaircraftloansuponaircraftdeliveries.Wemayalsoarangefor

financingfromothermeansincludingcomercialbanks(forunsecuredebts),debtcapitalmarketsand

equityinvestors.Asat31December2024,theamountofoutstandingaircraftpurchasecomitments

wasHK$45.1bilion,whichwasexpectedtobefinancedby(a)PDPfinancing,(b)aircraftloans,(c)

unsecuredworkingcapitalfacilities,(d)isuanceofdebtcapitalinstruments,(e)equity/equity-like

financings,(f)disposalofaircraft;and/or(g)internalygeneratedfinancialresources.Asat31

December2022,2023and2024,ourbankandotherborowingsforaircraftacquisitionamountedto

HK$19,083.3milionHK$23,309.6milionandHK$21,537.1milion,respectively.Thebalancesofour

PDPfinancingwereHK$7,180.3milion,HK$6,127.8milionandHK$6,294.1milion,respectively.

PDPscheduledtobepaidwithin12monthsfrom31December2024amountedtoHK$3,873.3milion

excludingthePDPofthoseaircraftwhichthedeliveryschedulesarenotyetconfirmed.

Aircraftacquisitionborowingisusualyconfirmedafewmonthsbeforedeliveryoftherelevantaircraft

basedonindustrypracticeandourpriorexperience.Besides,wesometimesfinanceournewaircraft

withinternalresourcesorshort-termfinancingandwemighthavetobtainrefinancingforthese

aircrafthroughnewaircraftprojectloans.Forthexistinglong-termaircraftborowings,thexpected

cashinflowsfromleasereceivablesgeneralyaresuficientocovertherequiredcashoutflowsfor

instalmentrepaymentsoverthentireleaseterm.Inordertometouraircraftpurchasecomitmentand

maintainanadequatelevelofunrestrictedcash,wenedtoensurethatasuficientlevelofinancingis

availableintimeandthatherewilbenosignificantof-leasetimefortheaircraftagredtobe

purchasedbyus.Ourabilitytobtainfinancingisdependentonanumberofactorsoutsideourcontrol,

whichinclude:

•thegeneralmarketconditions;

•themarket’sperceptionofthequalityofourasets;

•themarket’sperceptionoftherelevantindustryrisk;and

•theinterestratefluctuations.

Negativesentimentinthecapitalandcreditmarketsfromwhichwesourceourfinancingcouldleadto

comercialbanksandotherfinancialinstitutionsbeingleswilingtoprovideaircraftacquisition

financing;orthecostofsuchfinancingwouldnotbecomercialyaceptabletous.Inanyofthese

events,wemayfacealiquiditygapandwemaynedtouseothermeans,suchaselingouraircraft

asetsataninapropriatetime,tosuportourfundingneds.Fortheyearended31December2024,we

haveincurednetcashoutflowsfromfinancingactivitiesintheamountofHK$4,107.0miliondueto

reductionoftotalfletsizeandcashandcashequivalentbalanceasat31December2024.

Ifweareunabletobtainsuficientfinancingfrombanksorotherfinancingsourcesoncomercialy

aceptableterms,ourbusines,operatingresults,andfinancialconditioncouldbematerialyand

adverselyafected.

Anyincreaseininterestrateswouldincreaseourborowingcostswhichcouldadverselyafectour

businesandfinancialperformance.

Priortothendof2022,asubstantialportionofourbankborowings,includingaircraftloans,PDP

financingandotherbankborowings,wasubjectofloatinginterestrateswithreferencetonemonth,

thre-monthorsix-monthU.S.$LIBOR.InMarch2021,theUKFinancialConductAuthority(“FCA”)

anouncedthedateonwhichLIBORwilbediscontinued.Theone-wekandtwo-monthU.S.$LIBOR

setingshadiscontinuedafter31December2021andtheremainingU.S.$LIBORsetingshad

discontinuedafter30June2023.Duringthesix-monthperiodended30June2023,thetransitionofal

legacycontractsofinterestrateswapsandthemajorityoflegacycontractsofbankborowingslinkedto

U.S.$LIBORswasundertakensucesfuly.Thetransitionofremainingbankborowingcontracts

linkedtoU.S.$LIBORswerecompletedbeforethendofthirdquarterin2023.Asat31December

2022,2023and2024,ourbankandotherborowingsthatweresubjectofloatinginterestrate

represented78.4%,64.7%and66.1%,respectively,ofthebalanceofourtotalbankandother

borowings.Wexpecthatmostofourbankandotherborowingswilcontinuetobesubjecto

floatinginterestratesinthefuture.

Interestratefluctuationshaveasignificantinfluenceonourfinancialperformance.Anychangesin

interestrateswilimpactourborowingcostsasasizeableportionofourdebtisonafloatingratebasis.

Wemaybesusceptibletointerestratevolatilityifweareunabletomaintainabalancebetwenfixed

andfloatingratedebtsandmatchthefixedleaserentandleasematuritieswithfinancingdebtson

similarbasisorsecureapropriatehedgesforthesame.Whilethexposuretointerestratevolatility

maybehedgedthroughtheuseofinterestrateswapsandinterestratecaps,themagnitudeofthefinal

exposuredependsonthefectivenesofthehedge.Asat31December2024,wehad16interestrate

swapcontractstomanageourunmatchedinterestratexposureastheyhavetheconomicefectof

convertingbankborowingsfromfloatinginterestratesintofixedinterestratesintherangebetwen

0.4%and4.1%.

Fortheunhedgedexposure,wecloselymonitortheinterestratetrendandwilconsiderhedgingthe

exposurewherenecesaryandapropriate.

Ourbusinesmodeldependsonthecontinuingleasingofaircraft.

Ourbusinesmodeldependsonthecontinuingleasingofaircraftforconstantcashinflowsoflease

incomewhichwilbeusedfortherepaymentsoftheaircraftloansincuredforaircraftacquisitions.

Ourabilitytoleaseaircraftis,however,subjectoanumberofactorsoutsideourcontrol,includingthe

rateofrecoveryfromtheconomicdownturn,theconomichangeinChinandglobaly,thelevelof

airtraficdemandinChinandglobaly,thedemandandsuplyofaircraftandaircraftleasingservices

inChinandglobaly,andthemarketvalueoftheaircraftweownorplantopurchase.Ifwearenotable

toleaseouraircraftatheapropriatetimeandonfavourableterms,ourbusines,operatingresults,and

financialconditioncouldbematerialyandadverselyafectedbytheconsequencesuchasthe

unexpectedlongof-leasetimeofouraircraft,insuficientcashflowsgeneratedfromtheaircraftlease

agrements,andposiblebreachofcovenantsandundertakingsinourfinancingarangementsand

aircraftpurchaseagrements.

Ouroperatinghistorymaynotbeindicativeofourfutureperformance.

China’saircraftleasingindustryhasashorthistory,andourbusinesonlycomencedin2006withthe

firstaircraftpurchaseandleasebacktransactioncompletedinSeptember2007.Wecompletedourfirst

directaircraftpurchaseandleasetransactioninSeptember2010withtheaircraftpurchasedfromthe

secondaryaircraftmarketsinEurope.Fortheyearsended31December2022,2023and2024,ourlease

incomewasHK$3,542.2milion,HK$4,199.2milionandHK$4,349.7milion,respectively.Ourlease

incomefromfinanceleasesandoperatingleasesincreasedby18.5%and3.6%fortheyears2023and

2024respectively.

Ourevenuesandnetprofitaregeneratedprimarilyfromfoursources,namelyfinanceleaseincome,

operatingleaseincome,governmentgrantsandnetgainsfromdisposalofaircraft.Fortheyearsended

31December2022,2023and2024,werecognisedHK$207.1milion,HK$124.5milionandHK$212.7

milion,respectively,asnetincomefromaircraftdisposalandaircraftcomponentstrading.Thesuces

ofcompletingfurtherdisposalofaircraftothirdpartiesisubjectoanumberofactorsoutsideour

control.Ourinterestexpensesmayincreaseordecreasedependingonthemarketinterestratesentiment,

ourdeliveryversusdisposalprogresesandhenceoveralfletsize.Ourcurencyexchangegains/loses

canarisefromunhedgedexposureonRMBduetothesignificantvolatilityinforeignexchangerates,

andouresultsofoperationsandfinancialperformancemaybeadverselyafected.Alofthesefactors

couldhaveanadverseimpactonouresultsfortheyearending31December2025.

Wemaynotbeabletosecureleasecomitmentforaircraftobepurchasedandeliveredtousunder

theaircraftpurchaseagrement.

Asat31December2024,wehavecomitedtopurchase124aircraftwhicharetobedeliveredtousin

stagesbythendof2028.

Ifwearenotabletosecuretimelyleasecomitmentinrespectoftheaircraftobepurchasedand

deliveredtous,wemaynedtoimplementourcontingencyplanswhichincluderequestingforthe

deferedeliveryoftheseaircrafteventhoughwewouldstilnedtocontinuepayingthepurchaseprice

balancesandparkingfesfortheseaircraft.Therelevantaircraftmanufacturermaynotagrewithsuch

deferedelivery,andwemayberequiredtotakethedeliveryoftheaircraftandleasetheaircrafton

lesfavourabletermsorthatwemaynedtotransfertherelevantaircraftdeliveryslototheraircraft

purchasers.Inanyofthesevents,ourbusines,financialcondition,andoperatingresultscouldbe

adverselyafected.Wemayalsofaceclaimsfromtherelevantaircraftmanufacturerforfailuretotake

aircraftdeliveryandoureputationintheaircraftleasingindustrywouldalsobeafected.

Inadition,thecontinuouspaymentofthepurchasepricebalances,withoutconfirmedlease

comitmentfromtheairlineoperators,mayresultinsignificantpresureonourfinancingneds,as

therewouldbenoinflowsofcashtosuporthepayment.AswehaveusedPDPfinancingtosuporthe

paymentofPDPs,wemayormaynotbeabletobtainsuchfinancingonfavourabletermsoratalif

theleasearangementinrespectoftheaircrafthasyetobefinalised.Insuchevent,forthepaymentof

thepurchasepricebalances,wewouldthenedtolokforothersourceofinancing,whichwould

furtheracelerateourliquiditynedsandourfinancialexposure.

Ourprofitabilitydependsonourabilitytopurchasemarket-aceptedaircraftatreasonableprices.

Theprofitabilityofourbusinesdependsonourabilitytopurchasemarket-aceptedaircraftat

reasonableprices.Purchaseofaircraftathighpricesmaynotbeprofitabletousaswemaynotbeable

togeneratesuficientcashinflowsthroughleaseincometosetletheaircraftacquisitionfinancing.In

adition,theselectionofapropriateaircraftisalsoimportantousunderourbusinesmodel.Athe

timeofmakingthepurchasecomitment,wehaveyetosecurethecorespondingleasecomitment

fromtheairlineoperators.Thisarangementexposesustotheriskthatwemaynotbeabletoleasethe

aircraftwithintheplanedperiodoftimeofdeliveryoftheaircraftoncomercialtermsaceptableto

us.

Moreover,ouraircraftacquisitionstrategyexposesustovariousrisksthatcouldmaterialyand

adverselyafectourbusines,operatingresults,andfinancialcondition,includingtherisksthatwe

could:

•impairourliquiditybyusingasignificantportionofouravailablecashorborowingcapacityto

financeouraircraftacquisitions;

•significantlyincreaseourinterestexpenseandfinancialeverageasweincuraditionalaircraft

acquisitionfinancing;and

•incurorasumeunanticipatedliabilities,losesorcostsasociatedwiththeaircrafthatwe

acquire.

Inanyofthesevents,ouroperatingresultsandfinancialconditioncouldbematerialyandadversely

afected.

Werelyonafewairlinecustomersforouraircraftleasingbusines.

Asat31December2022,2023and2024,wehad38,41and40airlinecustomers,respectively,forour

aircraftleasingbusines.Duringtheyearended31December2024,leaseincomeofHK$1,992.2

milionwasgeneratedfromthethrelargestairlinecustomers,representingaproximately46%ofthe

totaleaseincome.Theairlineindustryiscyclical,sensitivetoeconomicperformance,andhighly

competitive.Ourairlinecustomersareafectedbyglobaloregionalpublichealthcrises(suchasthe

COVID-19pandemic),fuelprices,politicaloreconomicinstability,teroristactivities,changesin

nationalpolicy,competitivepresures,labouractions,insurancecosts,economicrecesion,health

concerns,andotherpoliticaloreconomiceventsadverselyafectingtheglobaloregionalmarkets.Al

ofthesefactorsindirectlyafectheaircraftleasingindustry.Ourairlinecustomers’abilitytoreacto

andcopewiththecompetitivenvironmentinwhichtheyoperatewouldafectourbusinesand

financialcondition.Thelosofanyoneofourexistingairlinecustomersortheirinabilitytomakelease

paymentsonscheduleduetofinancialdificulties,bankruptcyorotherwisecouldadverselyafectour

cashflowandprofitability.Thiscouldalsoresultinaposiblebreachbyusoftheundertakingsand

covenantscontainedinanyofourfinancingagrements,resultinginanadverseimpactonourbusines,

operatingresults,andfinancialcondition.

Wearexposedtovariousrisksrelatedtothecomercialairlineindustry.

Wearexposedindirectlytothesamesetofriskfactorsasourairlineleses.Theabilityofeachlese

toperformitsobligationsunderaleasewildependprimarilyonthelese’sfinancialconditionand

cashflow,whichareafectedbyfactorsbeyondourcontrol,includingeconomiconditions,recesion,

deflationorfinancialsystemdistres,demandforpasengerairtravelandaircargoservices,industry

competition,competitionfromsubstituteservices,fluctuationsinfuelprices,interestratesandforeign

exchangerates,labourcostsandunionisues,maintenance,insurance,securityorothercosts,the

impactofairlinebankruptcies,aircraftacidentsorthefectofgeopoliticalorothereventsuchas

wars,socialunrest,pandemics,naturaldisastersandactsofterorism.Theairlineindustrygeneraly

andeachofourlesesisalsoafectedbygovernmentregulationofairlineoperations,competitionand

mergersandacquisitions,environmentalregulation,airportandotherinfrastructuralconstraints,the

availabilityofneworusedaircraftforleaseorpurchase,fluctuationsinjetfuelcostsdueto

environmentaleventsuchasthoserelatedtogrenhousegasemisionsandthegoalofreaching

net-zerocarbonemisionsby2050,changesintechnologyandtheavailabilityandcostofdebtand

equitycapitalandotherformsofinancingtoairlines.Ourbusinesandfinancialperformanceare

dependentontheperformanceofourlesesandtheirabilitytomanagetheserisksefectively.Tothe

extenthatheairlineindustryorourairlinelesesexperiencenegativefectsfromtheseoranyother

riskfactors,wemayexperience:

•areducedemandforouraircraftandhencelowerleaseratesoraircraftsalevalues;

•ahigherincidenceofleasedefaultsresultinginlostrevenuefromadelayorinteruptionin

paymentsorterminationofleasesandhigherlegalandtechnicalcostsasociatedwiththe

reposesionoftheaircraftanditsrecords;

•anedtodeferand/orestructureleasepaymentsfordelinquentairlinesorairlinesinfinancial

dificultywhichmayresultinlowerleaserevenueorthenedtomakeprovisionsforental

amountsinarears;and

•aninabilitytoplaceavailableaircraftonleaseonaceptableterms,whichcouldresultinus

incuringfinancingcostswhilenotcolectingrevenuefromtherelevantaircraftandincuring

storage,insurance,maintenanceandmodificationcostsresultingfromthegroundingofsuch

aircraftandtheirpreparationforelease.

Theocurenceofoneormoreoftheseventscouldresultinamaterialadversefectonourbusines,

financialconditionandresultsofoperationsandourabilitytoservicetheBonds.

Ourconcentratedexposuretoasingleindustrymakesusparticularlysusceptibletothedownturnsof

thatindustry.

Wearestablishedwiththeprincipalobjectiveofowningandinvestinginaportfoliofcomercialjet

aircraftwhichareplacedonmediumtolong-termleasestoairlines.Byconcentratingouroperations

andinvestmentsinthecomercialaircraftleasingindustry,wearesusceptibletodownturnsinthe

comercialairlineindustry,whichmayresultinourincomefromouraircraftleasesbeingadversely

afected.Concentratingouroperationsandinvestmentsinasingleindustryplacesusatgreaterisk

fromeventsorcircumstancesadverselyafectingthatindustry.Asaresult,ourbusines,financial

conditionandresultsofoperationsandabilitytoservicetheBondscouldbeadverselyafected.

Wearexposedtosignificantregionaleconomicandpoliticalconditionsduetotheconcentrated

locationofourlesesincertaingeographicalregions,whichcouldadverselyafectourfinancial

performance.

Throughourleses,wearexposedtolocaleconomicandpoliticalconditionsthatcaninfluencethe

financialperformanceofsuchleseslocatedinaparticularegion.Thefectoftheseconditionson

paymentstouswilbemoreorlespronouncedependingontheconcentrationoflesesinanyregion

experiencingadverseconditions.Theairlineindustryishighlysensitivetogeneraleconomic

conditions.Arecesionorotherworseningofeconomiconditionsinaparticularegionmayhavea

materialadversefectonthecreditworthinesofleseslocatedinthatregionorwithsignificant

operationsto,fromorwithinthatregionandthereforeontheiresultantabilitytometheirfinancial

andotherobligationsundertheirleases.Furthermore,adisruptioninthefinancialmarkets,aterorist

atack,naturaldisaster,pandemic,conflictorsocialunrest,higherorvolatilefuelpricesoraweaklocal

curencymayincreasetheadverseimpactonourleses.

WederiveourleaseincomemainlyfromlesesbasedinboththeChinaregionandoverseas.Recovery

oftheaviationindustryandthegeneraleconomyasawholeislikelytobegradualanduneven,with

timinguncertain.ThetradefrictioninvolvingmajoreconomiesuchastheUnitedStates,theEUand

China,theslowdownofglobalorlocaleconomicgrowth,freightandpasengertraficgrowthrates

withintheAsiaPacificregionandbetwentheAsiaPacificregionandotheregionscouldadversely

impactaircraftdemand,oroversuplyofaircraftintheregioncouldadverselyimpactleaseratesand

ourabilitytoleaseandreleaseouraircraft.

Wearesubjectoperationalrisksandrisksrelatingtourinformationtechnologysystems,

includingcybersecurityrisksanduseofnewemergingtechnologies.

Wearesubjectoperationalrisksuchasinternalandexternalfraud,risksrelatedtocustomers,

productsandbusinesactivities,executionrisks,closingandprocesmanagementrisks,employment

systemandworkplacesafety,damagetophysicalasetsandrisksrelatedtoinformationtechnology

systems.

Wehavestablishedaseriesofpoliciesandprocedurestoidentify,ases,monitor,manageandreport

operationalrisks.Operationalfailuresmaycauselosestousifthesemeasuresarenotputinplace

efectivelyordonotadequatelycoveralaspectsofouroperations.

Wedependonourinformationtechnologysystemstoprocesacuratelyalargenumberoftransactions

onatimelybasisandtostoreandprocesmostofourdataregardingourbusinesandoperations,which

includeourfinancialcontrol,riskmanagement,acounting,customerserviceandotherdataprocesing

systems,togetherwiththecomunicationetworksbetwenourvariousbranchoutletsandourmain

dataprocesingcentre.Wehaveadoptedanumberoftechnicalmeasuresandmanagementinitiativesto

ensurethesecureandreliableoperationofourinformationsystems.Wehavealsoproactivelydeveloped

informationsecurityprotectioninitiatives.However,ifaportionoralofourinformationtechnology

systemsmalfunctionduetoanydefectinsoftwareorhardwareoranydeficiencyinourinformation

securityprotection,orwefailtoefectivelyimproveorupgradeourinformationtechnologysystemson

atimelybasis,ourbusines,financialconditionandresultsofoperationscouldbematerialyand

adverselyafected.

Inadition,giventhecomplicatedandchangingexternalsituationandthenewchalengesbroughtby

technologicalinovation,wetreatcybersecurityasacriticalcomponentofourinformationsecurity

protection.In2024,weactivelyrespondedtothecomplicatedandchanginginternationalsituation,

emergingchalengesinfinancialcybersecurityandramatictechnologicaltransformation,adheredto

theproductionsafetymeasures,andmadeproduction,operationandmaintenancemoreinteligent.We

depenedthecybersecuritydefensesystembuilding,andcontinuouslystrengthenedthedatasecurity

managementcapabilitytoinjectstrongmomentumintodigitaltransformation.Despitethe

implementationofrobustcybersecuritydefences,ourinformationtechnologysystemsmaystilbe

vulnerabletosecuritybreachescausedbyunauthorisedacestoinformationorsystems,intentional

destructionorlosorcoruptionofdata,software,hardwareorothercomputerequipment,orany

cyber-atacks.Therecanbenoasurancethatourexistinginformationsecuritymeasureswilprevent

unforeseablesecuritylopholes,includingbreak-insandviruses,ransomwareatacksorother

disruptionsuchasthosecausedbydefectsinhardwareorsoftwareanderorsormisconductof

operators.Personswhocircumventourinformationsecuritymeasurescoulduseoursorourclients’

confidentialinformationilegalyandforciblytakecontrolofoursystemtodisruptournormalbusines

operationsandasesments.Anymaterialsecuritylopholesorotherdisruptionscouldexposeusto

risksofinancialosoregulatoryactions,whichmayinturnharmoureputationoresultsof

operations.

Theoperationofaircraftisubjectoenvironmentalawsandregulations,andotherenvironmental

concernswhichmayinturnadverselyafectourbusines.

Concernsregardinglobalwarmingandthenvironmentgeneralyhaveresultedinmanycountriesand

supra-nationalorganizationsenactinglegislationtoimposestricterlimitsonemisionsofcarbon

dioxide,carbonmonoxideandnitrogenoxidefromaircraftandtheirengines.Examplesofsuchlimits

includetheEmisionsTradingSystem(“EUETS”)ortheUKEmisionsTradingSystem(“UK-ETS”),

requiringaircraftoperatorstopurchaseandsurenderanumberofemisioncertificatesequaltocarbon

dioxidequivalentemisionscausedbyflightseveryear,andresolutionfortheCarbonOfsetingand

ReductionSchemeforInternationalAviation(“CORSIA”)asagredbytheInternationalCivilAviation

Organization(“ICAO”)GeneralAsembly.

TheinclusionofaviationwithintheEUETS,theUK-ETSoranyothersupra-nationalglobal

market-basedmechanismsorotheregulationsconcerningaircraftoraviationemisionsandthecosts

relatedtoairlines’compliancewithenvironmentalregulationinotherjurisdictionswilikelycontinue

toresultinhigherticketprices,resultantlowerdemand,andlowerairlineprofitability,whichmayhave

anadverseimpactonthefinancialconditionofairlinesandtheirabilitytomakeleasepayments,and/or

reducethesalesprocedsreceivedbyusupondispositionofanyaircraft.Whiletheairlineisprimarily

responsibleforthesecharges,intheventoftheinsolvencyoftheairline,alienafectingaleased

aircraftcouldrequirethelesortosetleunpaidchargesinordertorecoverposesionoftheleased

aircraftfolowinganairlinedefault.RegardingtheEUETS,thelesormayalsobethedirectly

responsiblepartyfortherequirementsoftheEUETSasanowneroftheaircraft,incasestheoperator

maynotbeidentifiable.

Therisksasociatedwiththeparticipationinthevariousemisionstradingschemescanbexpectedto

furtherincreaseovertheshort-andmediumterm.Forexample,theEUhasalreadyanouncedplansto

introducestricterulesfortheEUETS,includingfortheaviationsector,includingelevatingthetarget

ofemisionsreductions.Thesechangeswilikelyleadtoafurtherincreaseofcostsforemisions

certificatesovertheshort-tomediumterm,pricesforwhichavealreadymultipliedina

disproportionatemanersincethendoftheyear2020.

Suchinitiativesmayalsoimpactheglobalmarketforcertainaircraft.Compliancewithcurentor

futureregulations,taxes,dutiesorleviescouldcauseourairlinecustomerstoincurhighercostsand

leadtohigherticketprices,whichcouldmeanlowerdemandfortravel,loweraircraftresidualvalues

andadverseimpactsonthefinancialconditionofourairlinecustomersand/orcouldrendercertain

aircraftypeslespopularwhichcouldinturnadverselyimpactourabilitytoleaseourownedaircraftat

aloratfavourablerates.

Inadition,theairlineindustryhascomeunderincreasedscrutinybythepres,thepublicandinvestors

regardingthenvironmentalimpactofairtravel.Ifsuchscrutinyresultsinreducedairtravel,itmay

negativelyafectdemandforouraircraftandleses’abilitytomakeleasepaymentsandreducethe

valuewereceiveforouraircraftuponanydisposition.Further,increasedfocusonthenvironmental

impactofairtravelhasledtothemergenceofnumerousustainabilityinitiatives,includingthe

developmentofsustainableaviationfuel,andelectricandhydrogenpoweredaircraft.Whilethese

sustainabilityinitiativesareinthearlystagesofdevelopment,ifalternativeaircraftechnology

developstothepointofcomercialviabilityandbecomeswidelyacepted,wemaynotbeableto

adjustourorderbokinatimelymanerandcouldberequiredtoincurincreasedcostsandsignificant

capitalinvestmentstotransitiontosuchtechnology.

Anyoralofthesefactorscouldmaterialyandadverselyafectourbusines,financialconditionand

resultsofoperationsandourabilitytometourfinancialobligationsaswelasthevalueoftheBonds.

Ifourairlinecustomersencounterfinancialdificultiesandwedecidetorestructureouraircraft

leaseagrementsoreposesouraircraft,itwouldlikelyresultinlesfavourableterms.

Ifanairlinecustomerfailstomakepaymentsinfulorinpartunderaleaseorhasadvisedusthatitwil

failtomakepaymentsinfulorinpartunderaleaseinthefuture,wemayelectorberequiredto

restructurethelease,whichcouldresultinlesfavourableterms,oreposestheaircraftandterminate

theleasewithoutreceivingaloranyofthepastdueamounts.Ifwearenotabletoreleaseareposesed

aircraftpromptlyatfavourablerates,ourbusines,operatingresults,andfinancialconditioncouldbe

adverselyafected.

Provisionforimpairmentlosonfinanceleasereceivablesandoperatingleasereceivablesmaynotbe

adequate,andwemaynedtoincreaseourprovisionsforimpairedreceivables.

UndertheHKFRS9,therecognitionofimpairmentprovisionshalbebasedonexpectedcreditloses

ratherthanincuredactualcreditlosesasrequiredbytheprevioustandards.Theamountofprovision

forimpairmentlosisdeterminedonthebasisoftheHKFRS,andouracountingpoliciesandour

acountingjudgementsandestimateswithreferencetoanumberofactors,suchasthecreditworthines

ofourairlinecustomers,economiconditionsandtrends,write-ofexperience,delinquenciesandthe

valueofunderlyingcolateralandguarantes.Aplyingthisaproachandinviewoftheconomic

conditions,theoperationofairlines,thecolectionhistoryofthereceivablesduefromourairline

customersandtheimpactoftheCOVID-19pandemic,wemadeprovisionsforimpairmentlosof

HK$18.5milionasat31December2024(2022:HK$11.8milionand2023:HK$6.9milion)forour

financeleasereceivablesandHK$153.0milionasat31December2024(2022:HK$187.5milionand

2023:HK$203.6milion)forouroperatingleasereceivables.Thexpectedcreditlosesalowance

madeasat31December2024representsaround0.2%ofourfinanceleasereceivablesand40.6%ofour

operatingleasereceivablesasat31December2024.AsourprovisionundertheHKFRS,andour

acountingpoliciesrequiresignificantjudgementandestimation,itmaynotbeadequatetocover

creditlosrealisedinourfuturebusinesoperations.Theprovision,ifmade,maybeinadequateif

adversechangesocurinthePRCeconomyorothereconomiesinwhichweoperateorifotherevents

adverselyafectspecificustomersormarkets,resultinginleaserestructuringwithorbankruptcyofour

airlinecustomers.Undersuchcircumstances,wemaynedtomakeaditionalprovision,onourfinance

leaseoroperatingleasereceivables,whichcouldmaterialyandadverselyafectouroperatingresults,

andfinancialcondition.

Themarketvalueofouraircraftandthemarketratesforaircraftleasescouldfluctuatefromtimeto

time.

Theaircraftmarketvalueandthemarketratesforaircraftleasesexperiencesignificantfluctuationsdue

toanumberofactorsoutsideourcontrol,including,butwithoutlimitationto,increasesintheinterest

ratesandthefuelpricesandecreaseintheairtraficdemand.Ourlong-termaircraftleasesplaceonus

theriskofrealisationoftheresidualvalueofouraircraftathetimeofre-marketing.Wemayalso

encounteraircraftmarketvalueriskifwenedtoimplementourcontingencyplanbytransferingthe

aircraftdeliveryslotofanaircraftcomitedtobepurchasedandeliveredtoustoanythirdparty.In

aditiontothefactorsrelevantorafectingtheairlineindustrygeneraly,manyotherfactorsmay

afecthemarketvalueoftheaircrafthatweacquireandthemarketratesforleases,including,but

withoutlimitationto:

•theconditionoftheaircraftmaintainedbyourleses;

•themaintenance,operatinghistoryandocumentaryrecordsoftheaircraft;

•theageoftheaircraft;

•thenumberofairlinesusingthatypeofaircraftanditscompatibilityintermsofspecifications

andconfigurations;

•theregulatoryauthorityunderwhichtheaircraftisoperated;

•theregulatoryandlegalrequirementsthatmustbesatisfiedbeforetheaircraftcanbepurchased,

soldoreleased;

•themarketvalueofcomparableaircraft;and

•thecostandtheavailabilityofspareparts.

Ahighconcentrationofaparticularmodelofaircraftmayexposeustotherisksonanychangein

themarketdemandoranyproblemsorgroundingorderspecifictothataircraftmodel.

Asat31December2024,122outofthe159aircraftweownwereAirbusA320familyaircraft,12were

AirbusA330familyaircraftand21wereBoeingB737familyaircraft,onewasBoeingB787family

aircraftandthrewereCOMAC909seriesaircraft.Ifwecontinuetohaveahighconcentrationofa

particulartypeormodelofaircraft,ourbusinesandoperatingresultscouldbeadverselyafectedifthe

marketdemandforthatypeormodelofaircraftdeclinesorifitisre-designedoreplacedbyits

manufacturerbecauseofnewtechnologyorotherdesignortechnologicalisues.Inadition,ifthe

aircraftmodelsormodelsaspartofourfletencounterserioustechnologicalorotherproblems,

resultingingroundingdecisionsbytheaviationauthorities,themarketvalueandtheleaseratesofsuch

aircraftmaydeclinesignificantly.Wemaynedtomakeprovisionforimpairmentonthemarketvalue

oftheaircraft.Ourexistingairlinecustomersmayalsowantosekearlyterminationofthexisting

aircraftleaseagrements.Wemaynotbeabletoreleaseore-marketheaircraftonfavourableterms,or

atal.Furthermore,ifthereisanydesignorqualitydefectsinourflet,theremaybedelaysor

disruptionstourusualbusinesoperations.Inanyofthesevents,ouroperatingresultsandfinancial

conditioncouldbematerialyandadverselyafected.

Asat31December2024,theGrouphasalsocomitedtopurchaseaircraftfromAirbusandCOMAC

andtheseaircraftarescheduledfordeliveryinstagesupto2028.Intheventhatourexistingpurchase

ordersforalorsomeoftheaircraftarecanceledordelayed,orourairlinecustomersrejecthe

deliveryofsuchaircraftduetothegroundingdecisionbytheaviationauthorities,wemayberequired

toincuraditionalcosts,resultinginpotentialosordelayedrevenues,andhencelowerourevenue

growthrates.Also,wecanotasurethatwewilbeabletosourcereplacementaircraftintimeand/or

continuetometouraircraftdeliveryschedule,andthiscouldadverselyafectourbusinesreputation

andoperatingresults.Ifthereisanymisedordelayedeliveryofaircraft,wemaynotbeabletomet

ourleasecomitmentswithourairlinecustomersandtheymayelectoterminatetheirlease

arangementswithus.Anysuchterminationcouldadverselyafectouroperatingresultsandfinancial

condition.

Ouraircraftmaynotataltimesbeadequatelyinsuredeitherasaresultofairlinecustomers’failure

tomaintainsuficientinsuranceduringtheleasetermorinsurers’unwilingnestocovercertain

risks.

Althoughwedonotcontroltheoperationofourleasedaircraftunderourleases,wecouldbexposedto

theriskoflosofthevalueoftheaircraftandtheriskofliabilityfordamagesasociatedwiththe

operationoftheaircraft,includinginconectionwithanaircraftacident.Werequireourlesesto

obtainspecifiedlevelsofinsuranceandindemnifyusfor,andinsureagainst,amongstother

contingencies,liabilitiesarisingoutoftheuseandoperationoftheaircraft,includingthird-partyclaims

fordeathorinjurytopersonsandamagetopropertyforwhichwemaybedemedliable.

Therecanbenoasurancethathelese’sinsurance,andanycontingentinsuranceobtainedbyus,wil

beadequateorsuficientocoveraltypesofclaimsthatmaybeasertedagainstusoradequateto

coverthevalueoftherelevantaircraftagainstlosordamage.Inadequateinsurancecoverageordefault

byairlinecustomersinfulfilingtheirindemnificationorinsuranceobligationscouldreducethe

procedsthatwouldbereceivedbyusintheventhatwearesuedandarerequiredtomakepayments

toclaimants,whichcouldhaveamaterialadversefectonouroperatingresultsandfinancial

condition.

WemaynotbeabletocompetefectivelyintheaircraftleasingindustryinChinaorglobaly.

TheaircraftleasingindustryinChinandglobalyisincreasinglycompetitive.Someofourcompetitors

inChinandglobalyaresignificantlylargerthanusintermsofoperationalsize,havealonger

operatinghistory,andhavegreateresourcesorlowercostofcapital.Competitionforaleasing

transactionisbasedprimarilyupontheleaserates,deliverytime,leaseterms,managementexpertise,

aircraftcondition,specificationsandconfiguration,andtheavailabilityofthetypesofaircraft

necesarytomethenedsoftheairlineoperators.Inadition,somecompetingaircraftleasing

companiesinChinandglobalymayhavealoweroveralcostofcapitalandmayprovideother

value-adingservicestopotentialairlinecustomersthatwemaynotbeabletoprovide.

Inaditiontothecompetitionforleasingtransactions,wemayalsoencountercompetitioninaircraft

acquisitionfromairlines,aircraftbrokers,otheraircraftleasingcompanies,andotherinvestors

interestedintheairlineindustryinChinandglobaly.Theincreasingcompetitionmayafectheprice

oftheaircraftandthedeliveryschedule,particularlyinlightofthefacthatheaircraftmanufacturing

industryisdominatedbytwotothreaircraftmanufacturersglobaly.Inanyofthesevents,our

profitabilitycouldbeadverselyafectedandouraircraftdeliveryschedulemaynedtobextended

whichcouldafectourbusinesreputationandoperatingresults.

Wemaynotbeabletoexecuteourgrowthstrategiesandexpansionplansandourgrowthprospects

maybelimited.

Ourgrowthstrategiesarebasedonourexistingplansinlightofprevailingmarketconditionsand

posibleindustrydevelopments,andaresubjectoinherentrisksanduncertaintiesatdiferent

developmentstages.Theformationofourgrowthstrategiesisbasedonasumptionsofuturevents

whichinclude,butwithoutlimitationto,nomaterialchangesinexistingpolitical,legal,fiscal,foreign

tradeoreconomiconditionsinChina,nomaterialchangeintechnologyandinourbusines

relationshipsbetwenourairlinecustomersandfinancingsource.Theseasumptionsmaynotbe

corect,whichcouldafecthecomercialviabilityofourgrowthstrategies.Insuchevent,wemay

nedtoadjustourstrategiesinresponsetothechangingmarketconditions.

Asof31December2024,124aircraftwerecomitedtobepurchasedbyus.Wecanotasureyouthat

wewilbeabletosucesfulyleaseoutheaircraftinthefuture.Inadition,failuretoefectively

manageourbusinesgrowthmayleadtoincreasedcosts,reducedcompetitivenesandecreased

profitabilityforus.Thiscouldadverselyafectouroperatingresultsandfinancialcondition.

Ourstrategyofpositioningourselvesasafulife-cycleaircraftsolutionsprovidermaynotbe

sucesfulyimplemented.

Aspartofourbusinesdevelopmentplanasaone-stopaircraftfulife-cyclesolutionsprovider,we

havealsotapedintothemergingoportunitiesintheaircraftrecyclingmarket,aircraftcomponent

disasemblyandusedpartstrading,inaditiontourexistingaircraftleasingbusines,toprovidemore

value-adedservices.Forfurtherdetails,se“DescriptionoftheGroup–OurGrowthStrategies–

Continueourdevelopmentasafulife-cycleaircraftsolutionsprovider”.

Pursuingtheabovebusinesdevelopmentplansinvolvesinherentbusinesrisks,suchasmaking

incorectestimationonthelevelofdemandforaircraftrecycling,aircraftcomponentdisasemblyand

usedpartstradingservicesinChinandglobaly.Ourexpertiseandexperienceinthexistingaircraft

leasingbusinesmaynotberelevantothebusinesinvolvingaircraftrecycling,aircraftcomponent

disasemblyandusedpartstrading.Inadition,thexistinglobalmarketparticipantsoftheaircraft

recyclingmarketmayhavecompetitiveadvantagesoverus,andourlimitedexperienceintheaircraft

recycling,aircraftcomponentdisasemblyandusedpartstradingbusinesmayresultinouraircraft

recycling,aircraftcomponentdisasemblyandusedpartstradingbusinesbeinglesatractivetour

targetcustomersandhence,lesrevenuegeneratedtous.Furthermore,ouraircraftrecycling,aircraft

componentdisasemblyandusedpartstradingbusinesinPRCisubjectedtolocalrules,policies,and

regulations.

Whilewehavexpandedourprovisionoftheaviationaftermarketservices,wecanotasureyouthat

anyoftheaboveplanswilbesucesfulyimplemented.Thesucesfulimplementationoftheseplans

wilinvolveaditionalcostanduncertainties.Iforanyreasonanyoftheseplanscanotbe

implementedorthatitdoesnotachievetheplanedoutcome,ourbusinesorfinancialconditioncould

beadverselyafected.

Therearealimitednumberofaircraftmanufacturersandthefailureofanymanufacturertometits

deliveryobligationstouscouldadverselyafectourbusinesandoperatingresults.

Theaircraftleasingandsalesindustryiscyclicalandexperiencesperiodsofoversuplyand

undersuply.Thesuplyofpasengeraircraftispresentlydominatedbytwotothreairframe

manufacturers,namelyAirbus,BoeingandCOMAC,alimitednumberofenginemanufacturers,anda

largernumberofsupliersofavionics,interiors,sparesandotherequipmentfitedtotheaircraft.The

manufacturers’abilitytoremainfinancialyviableandproduceaircraftandrelatedcomponentsthat

metairlines’requirementswouldhaveanimpactonus.

Shouldtheairlinemanufacturersfailtorespondapropriatelytochangesinthemarketenvironmentor

failtofulfilanycontractualobligationstheymighthavetous,wemayexperience:

•anadverseimpactondemandforleasedaircraft,marketleaseratesandaircraftvaluesresulting

fromoversuplyorundersuplyofaircraftduetochangesinproductionratesofthe

manufacturers;

•misedordelayedeliveryofaircraftandapotentialinabilitytometourcontractualobligations

owedtoanyofourthenleses,resultinginpotentialostordelayedrevenues,lowerevenue

growthratesandstrainedleserelationships;and/or

•aninabilitytoacquireaircraftand/orcomponentswhichcouldafecthedemand,marketlease

rates,residualvaluesforcertainaircraftand/orourabilitytoleasethoseaircraft.

Iftherearedelaysindeliveringaircraftforwhichwehavemadefutureleasecomitments,ourairline

customersmayelectoterminatetheirleasearangementswithus.Anysuchterminationcouldstrain

ourelationswiththoseairlinecustomersinthefutureandadverselyafectouroperatingresultsand

financialcondition.

Newaircraftmodelscouldreducethedemandforouraircraft.

Asaircraftmanufacturerscontinuetointroducetechnologicalinovationsandnewmodelsofaircraft

withimprovedfueleficiency,someoftheaircraftinourfletcouldbecomelesdesirabletopotential

airlinecustomers.Suchtechnologicalinovationsmayaceleratetherateofobsolescenceofourfletof

aircraft.Inadition,newaircraftmanufacturers,suchasCOMACinChina,mayinthefutureproduce

aircrafthatcompetewithcurentoferingsfromAirbusandBoeing.

Theimpositionofincreasinglystringentnoiseoremisionsrestrictionsmaymakesomeofouraircraft

lesdesirableandlesvaluableinthesecondaryaircraftmarket.Anyoftheseriskscouldadversely

afectourabilitytoleaseorselouraircraftonfavourableterms,ifatal,whichcouldhaveamaterial

adversefectonourbusines,financialcondition,andoperatingresults.Theintroductionofnew

aircraftmodelscouldalsomaterialyandadverselyafecthemarketvalueofourflet.

Thelosofkeypersonelcouldadverselyafectoureputationandrelationshipswithleses,

manufacturers,buyersandfinanciersofaircraft,whichareacriticalelementothesucesofour

performance.

Ourbusinesoperationsandperformancedepend,inpart,uponthecontinuedserviceandperformance

ofcertainkeystafmembers.Thesekeypersonelmayleaveusinthefuturetojoinotheremployers,

includingourcompetitors,oretire.Thelosofanyoftheseindividualscouldhaveamaterialadverse

efectonourbusines,financialconditionandresultsofoperations.

Ourfailuretobtain,renew,oretaincertainrequiredlicencesandaprovalsorfailuretocomply

withaplicablelawsandregulationscouldadverselyafectourbusinesandoperatingresults.

ChinaAsetLeasingCompanyLimited(中飞租融资租赁有限公司)(“CALC(Tianjin)”),China

AircraftLeasingCompanyLimited(Shanghai)(中永顺融资租赁(上海)有限公司)anditsubsidiariesin

China,whichareSPCs,aresubjectoanumberofregulationsunderthePRClaws.Forinstance,the

businescopesetforthinthebusineslicencesoftheSPCsinChinaisrequiredtoincludeleasing

businesinordertoconductleasingbusinesinChina.Besides,ourSPCsinChinahavetobtainthe

taxregistrationcertificate,theforeignexchangecertificateandtheorganisationcodecertificate.Ifor

whatevereasonwearenotabletobtainorenewanyoftheselicencesorcertificates,ouroperating

resultscouldbeadverselyafected.

Inadition,ourairlinecustomersaresubjectoextensiveregulationsunderthelawsofthejurisdictions

inwhichtheyareregisteredandinwhichtheyoperate.Asaresult,certainaspectsofouraircraftlease

agrementswilrequirelicences,consentsoraprovals,includingconsentsfromgovernmentalor

regulatoryauthoritiesforcertainpaymentsunderourleasesandfortheimport,exportorderegistration

oftheaircraft.Subsequentchangesintheaplicablelaworadministrativepracticesmayincreasethe

riskthatsuchrequirementsandgovernmentalconsent,oncegiven,couldbewithdrawn.Anyofthese

eventscouldadverselyafectourabilitytoreleaseorselaircraft,whichwouldmaterialyandadversely

afectourbusinesandoperatingresults.

Wemaynotbeabletodetectandpreventfraudorothermisconductcomitedbyouremployesor

thirdparties.

Fraudorothermisconductbyemployes(suchasunauthorisedbusinestransactionsandbreachesof

ourinternalpoliciesandprocedures)orthird-parties(suchasbreachoflaw)maybedificultodetect

andpreventandcouldsubjectustofinancialos,sanctionsimposedbygovernmentalauthoritiesand

seriouslyharmoureputation.Ouriskmanagementsystems,informationtechnologysystems,and

internalcontrolproceduresaredesignedtomonitorouroperationsandoveralcompliance.However,we

maynotbeabletoidentifynon-compliancematersinatimelymaneroratal.Furthermore,itisnot

alwaysposibletodetectandpreventfraudorothermisconductandtheprecautionswetaketoprevent

andetectsuchactivitiesmaynotbefective.Hence,therexiststheriskthatfraudorother

misconductmayhavepreviouslyocuredbutwasundetected,ormayocurinthefuture.Thiscould

haveamaterialadversefectonourbusinesreputation,operatingresults,andfinancialcondition.

ChangesintaxregimesglobalymayimpactheGroup’sefectiverateoftaxinfutureperiods.

TheGroup’sefectivetaxrateinanyperiodisimpactedbythesourceandtheamountofearnings

amongitsdiferentaxjurisdictions,includingthePRC,IrelandandHongKong,etc.Achangeinthe

divisionofitsearningsamongitstaxjurisdictionscouldhaveamaterialimpactontheGroup’sefective

taxrateanditsfinancialresults.Inadition,theGuarantororitsubsidiariesmaybesubjecto

aditionalincomeorothertaxesintheseandotherjurisdictionsbyreasonofthemanagementand

controlofitsubsidiaries,itsactivitiesandoperations,whereitsaircraftoperate,wherethelesesof

itsaircraft(orothersinposesionofitsaircraft)arelocatedorchangesintaxlaws,regulationsor

acountingprinciples.TheimpositionofsuchtaxesontheGroupcouldhaveamaterialadversefect

onitsfinancialconditionandresultsofoperations.

TheOrganisationforEconomicCoperationandDevelopment(“OECD”)hasundertakentheBase

ErosionandProfitShifting(“BEPS”)projectwiththeaimofadresingperceivedflawsin

internationaltaxrulesbyrecomendingthatOECDmemberstateschangedomestictaxlawsand

introducingaditionaloramendedprovisionsindoubletaxationtreaties.Itistheresponsibilityof

OECDmemberstoconsiderhowtheBEPSrecomendationshouldbereflectedintheirnational

legislation.SeveralareasoftaxlawonwhichBEPSfocusesarepotentialyrelevantourabilityto

eficientlyrealizeand/orepatriateincomeandcapitalgainsfromthejurisdictionsinwhichtheyarise.

Dependingonthextentoandmanerinwhichrelevantjurisdictionsimplementchangesinthoseareas

oftaxlaw,ourabilitytodothosethingsmaybeadverselyimpacted.

InresponsetotheBEPSrecomendations,certainjurisdictionshavetakenstepstochangetheirtax

legislation,taxtreaties,andguidelinesontaxinterpretationincludingtheaplicationoftaxtreaty

benefitstopaymentsmadetoforeigncompanies.OECDalsocontinuestodevelopfurtherBEPS

recomendationswhicharebeingreleasedonanongoingbasis,includingtheproposedglobal

minimumcorporatetaxruleswhichareintendedtosubjectspecifiedincomeoflargemultinational

enterprisestoaminimumcorporatetaxrateofatleast15%.Asuch,therearelikelytobefurther

significantchangesinthetaxlegislationofthevariousOECDaswelasnon-OECDjurisdictionsduring

theperiodofimplementationofBEPS,anditisnotclearpreciselyhowsuchchangesmayultimately

impactus.ItisposiblethatheimplementationofBEPSinspecificjurisdictionsmayhavenegative

implicationsforus,includingtheproposedminimumcorporatetaxrules,theproposedtransferpricing

rules,changestothepermanentestablishmentdefinitionintaxtreatieswhichinturnmayexposeusto

foreigntaxesonleaserentalpaymentsfromairlinecustomers,andthepotentialforareductioninthe

taxdeductibilityofdebtinterest.

WemaynotbeabletometourtargetsforESGorcorporatesocialresponsibility.

Wehavecomprehensivelyandconsistentlyimplementedthenewdevelopmentphilosophyof“gren

aviation”,whiletakingfuladvantageoftheaircraftful-value-chainbusinesmodel,soastoexpedite

ourcorporatecapacityin“environmental,socialandgovernance”(“ESG”)management.Withthefocus

onthenewindustrialtrendagainsthebackdropof“grenaviation”,weinvestedinthemostpopular

new-generationaircraftwiththeworld-clasfueleficiency,whichelpairlinesoptimisetheirflet

structureandimprovethelevelsofenergysavingsandemisionreduction.Meanwhile,countingonthe

twomajorfuly-licensedomesticandoverseasaircraftrecyclingfacilities,weproactivelyoptimisedits

industrychaindeploymentandinitiatedbusinesinovationinthefieldoflow-carbonandcircular

economy,whichprovidedglobalcustomerswithone-stopgrensolutionwithafletofhigherquality,

andfurtherstrengthenedourempowermentandstimulationtothesustainabledevelopmentofglobal

aviationindustry.

WeatachedhighimportancetourESGefortsandmadeproactivexplorationandinovation.CALC

(Tianjin)undertheGrouphasucesfulyisuedthefirstlow-carbontransitionbondamongthe

domesticaviationindustryandaircraftoperationaleasingindustry,whichwereoversubscribed,asa

steptopracticethephilosophyofgrenfinanceandcontributetotheconstructionofdomesticivil

aviationdevelopmentsystemofgren,recycledandlow-carbonature.Overthepastyearswehave

benawardedwithvarioushonours,whichsymbolisedthecontinuousmarketrecognitionstoitsESG

practices.

However,therecanbenoasurancethatwewilalwaysbeabletometourESGorCorporateSocial

Responsibility(“CSR”)goals.Externalfactors,suchasmarketandmacro-economicmovementsmay

haveanimpactonourabilitytomaintaincompliancewithourESGpoliciesortoachieveourESGor

CSRgoals.OurfailuretometourESGorCSRgoalsmayadverselyafectoureputation,busines,

financialconditionandresultsofoperationsand,inparticular,couldcreatelegalandreputationalrisks.

RISKSRELATINGTOCONDUCTINGBUSINESINTHEPRC

Economic,politicalandsocialconditionsinthePRCandgovernmentpoliciescouldafectour

businesandprospects.

AmeaningfulproportionofouroperatingincomeisderivedfromouroperationsinthePRC.

Acordingly,ourfinancialcondition,resultsofoperationsandprospectsare,toamaterialextent,

subjectoeconomic,politicalandlegaldevelopmentsinthePRC.ThePRCeconomydifersfromthe

economiesofdevelopedcountriesinmanyrespects,including,amongotherthings,government

involvement,levelofeconomicdevelopment,growthrate,foreignexchangecontrolsandresources

alocation.

AlthoughthePRCeconomyhasbentransitioningfromaplanedeconomytoamoremarket-oriented

economyformorethanthredecades,asubstantialportionofproductiveasetsinthePRCistil

ownedbythePRCgovernment.ThePRCgovernmentalsoexercisesignificantcontroloverthe

economicgrowthofthePRCthroughalocatingresources,controlingpaymentsoforeign

curency-denominatedobligations,setingmonetarypolicyandprovidingpreferentialtreatmento

particularindustriesorcompanies.Inrecentyears,thePRCgovernmenthasimplementedmeasures

emphasisingtheutilisationofmarketforcesineconomicreform,thereductionofstateownershipof

productiveasetsandthestablishmentofsoundcorporategovernancepracticesinbusinesenterprises.

Theseconomicreformeasuresmaybeadjustedormodified,orapliedinconsistentlyfromindustry

toindustryoracrosdiferentregionsofthecountry.Asaresult,wemaynotbenefitfromsomeofthese

measuresandtherecanbenoasurancethathePRCgovernmentwilcontinuetopursuethese

measures.

ThePRCgovernmenthasthepowertoimplementmacroeconomicmeasuresafectingthePRC

economy.Forexample,tomitigatethenegativeimpactoftheglobalfinancialcrisisandeconomic

downturnin2008,thePRCgovernmentimplementedaseriesofmacroeconomicmeasuresanda

moderatelylosemonetarypolicybetwenSeptember2008tothendof2009,whichincluded

anouncinganRMB4.0trilioneconomicstimuluspackageandreducingbenchmarkinterestrates.In

2010and2011,thePRCgovernmentintroducedanumberofmonetarytighteningmeasurestocol

downtheoverheatedrealestatemarketsandincreasinginflationinthePRC.Since2012,thePeople’s

BankofChina(中国人民银行)(the“PBOC”)anouncedseveraldecreasesinbenchmarkinterestrates

forgeneralendingandthedepositreserveratioforcomercialbanksinthePRC.Thereserve

requirementreferstotheamountofundsthatbanksmustholdinreservewiththePBOCagainst

depositsmadebytheircustomers.Anyfurtherincreasesinthebankreserverequirementratiomay

negativelyimpactheamountofundsavailabletolendtobusineses,includingus,bycomercial

banksinthePRC,whichmaylimitourflexibilityandabilitytousebankloansorotherformsof

financingtofinanceouraircraftacquisitionsandthereforemayrequireustomaintainarelativelyhigh

levelofinternalysourcedcash.Asaresult,ourbusines,financialconditionandresultsofoperations

maybematerialyandadverselyafected.

ThePRCgovernmentmayalsochangeitsexistingmeasuresandpolicies,suchasgovernmentgrantsto

suporthedevelopmentofaircraftleasingindustrycurentlyreceivedbytheGroupforitsbusinesin

TianjinandShanghai.Fortheyearsended31December2022,2023and2024,ourotheroperating

incomefromgovernmentgrantsareHK$212.0milion,HK$171.8milionandHK$316.2milion,

respectively.IntheventhathePRCgovernmentnolongerprovidesuchgrantsduetoanychangesin

itsexistingmeasuresandpolicies,ouroperatingincomewilbeadverselyafected.

ThePRClegalsystemisevolvingandmayhaveuncertaintiesthatcouldlimithelegalprotection

availabletoragainstus.

WearegeneralysubjectolawsandregulationsofthePRC.ThePRClegalsystemisbasedonwriten

statutes.Priorcourtdecisionsmaybecitedforeferencebuthavelimitedprecedentialvalue.Since

1979,PRClegislationandregulationshavesignificantlyenhancedtheprotectionsafordedtomarket

participantsinthePRC.However,sincetheselawsandregulationsarerelativelynewandthePRClegal

systemcontinuestorapidlyevolve,theinterpretationsofmanylaws,regulationsandrulesarenot

alwaysclearandenforcementoftheselaws,regulationsandrulesmayinvolveuncertainties,andmay

notbeasconsistentorpredictableasinothermoredevelopedjurisdictions.Theseuncertaintiesmay

impedetheabilitytoenforcethecontractswehaventeredintowithourinvestors,creditors,customers,

supliersandbusinespartners.WecanotpredicthefectofuturedevelopmentsinthePRClegal

systemortheintegrationofsuchdevelopmentsunderthelegalsystemsofthejurisdictionsincluding

HongKong,thejurisdictionofthegoverninglawoftheBonds,includingthepromulgationofnewlaws,

changestoexistinglawsortheinterpretationorenforcementhereof,thepre-emptionoflocal

regulationsbynationalaws,ortheoverturnoflocalgovernment’sdecisionsbyitself,provincialor

nationalgovernments.Theseuncertaintiesmaylimitlegalprotectionsavailabletoragainstus.In

adition,anylitigationinthePRCmaybeprotractedandresultinsubstantialcostsandiversionof

resourcesandmanagementatentionandhaveamaterialadversefectonourbusines,prospects,

financialconditionandresultsofoperations.

Itmaybedificultoefectserviceofprocesupon,ortoenforceagainst,theIsuer,theGuarantor

ortheirespectivedirectorsormembersoftheIsuer’sortheGuarantor’seniormanagementwho

resideinthePRCinconectionwithjudgmentsobtainedinonPRCcourts.

MostofourasetsandourmembersarelocatedinthePRC.Inadition,mostoftheasetsofthe

Isuer’sandtheGuarantor’sdirectorsandthemembersoftheIsuer’sandtheGuarantor’senior

managementmaybelocatedwithinthePRC.Therefore,itmaynotbeposibleforinvestorstoefect

serviceofprocesuponortoenforceanyjudgementobtainedfromoutsidethePRCagainst,theIsuer,

theGuarantorortheirespectivedirectorsormembersoftheIsuer’sortheGuarantor’senior

managementinsidethePRC.ThePRChasnotenteredintotreatiesorarangementsprovidingforthe

recognitionofjudgmentmadebycourtsofmostotherjurisdictions.On14July2006,HongKongand

thePRCenteredintotheArangementonReciprocalRecognitionandEnforcementofJudgmentsin

CivilandComercialMatersbytheCourtsoftheMainlandandoftheHongKongSpecial

AdministrativeRegionPursuantoChoiceofCourtAgrementsBetwenPartiesConcerned(关于内地

与香港特别行政区法院相互认可和执行当事人协议管辖的民商事案件判决的安排)(the“Choiceof

CourtArangement”),pursuantowhichapartywithafinalcourtjudgmentrenderedbyaHongKong

courtrequiringpaymentofmoneyinacivilandcomercialcaseacordingtoa“choiceofcourt”

agrementinwritingmayaplyforecognitionandenforcementofthejudgmentinthePRC.Similarly,

apartywithafinalcourtjudgmentrenderedbyaPRCcourtrequiringpaymentofmoneyinaciviland

comercialcasepursuantoa“choiceofcourt”agrementinwritingmayaplyforecognitionand

enforcementofsuchjudgmentinHongKong.A“choiceofcourt”agrementinwritingisdefinedasany

agrementinwritingenteredintobetwenpartiesafterthefectivedateoftheChoiceofCourt

ArangementinwhichaHongKongcourtoraPRCcourtisexpreslydesignatedasthecourthaving

solejurisdictionforesolvingthedispute.Therefore,itisnotposibletoenforceajudgmentrendered

byaHongKongcourtinthePRCifthepartiesindisputedonotenterintoa“choiceofcourt”

agrementinwriting.Asaresult,itmaybedificultorimposibleforinvestorstoefectserviceof

procesagainstheIsuerortheIsuer’sdirectorsormembersofitseniormanagementinthePRC

and/ortosekrecognitionandenforcementforforeignjudgmentsinthePRC.On18January2019,

HongKongandthePRCenteredintotheArangementonReciprocalRecognitionandEnforcementof

JudgmentsinCivilandComercialMatersbetwentheCourtsoftheMainlandandoftheHongKong

SpecialAdministrativeRegion(关于内地与香港特别行政区法院相互认可和执行民商事案件判决的安

排)(the“2019Arangement”),whichsekstoestablishabilateralegalmechanismwithgreaterclarity

andcertaintyforecognitionandenforcementofjudgmentsinawiderangeofcivilandcomercial

matersbetwenthecourtsofHongKongandthePRC.The2019Arangementokefecton29

January2024,andapliestojudgmentsmadebythecourtsofHongKongandthePRC.Upon

comencementofthe2019Arangement,theChoiceofCourtArangementshalbeterminated,except

for“choiceofcourt”agrementsinwritingmadebetwenpartiesbeforethecomencementofthe2019

Agrement,inwhichcasetheChoiceofCourtArangementshalcontinuetoaply.However,the

recognitionandenforcementofjudgmentsrenderedbyaHongKongcourtinthePRCaresubjectothe

provisions,limits,proceduresandothertermsandrequirementsofthe2019Arangement.Therecanbe

noasurancethatinvestorscansucesfulyefectserviceofprocesagainstheIsuerortheIsuer’s

directorsormembersofitseniormanagementinthePRCand/ortosekrecognitionandenforcement

forjudgmentsrenderedbyaHongKongcourtinthePRC.

Furthermore,thePRCdoesnothavetreatiesoragrementsprovidingforthereciprocalrecognitionand

enforcementofjudgmentsawardedbycourtsoftheUnitedStates,theUnitedKingdom,ormostother

EuropeancountriesorJapan.Hence,therecognitionandenforcementinthePRCofjudgmentofacourt

inanyofthesejurisdictionsinrelationtoanymaternotsubjectoabindingarbitrationprovisionmay

bedificultorevenimposible.

ThenforcementoftheNewLabourContractLawandotherlabour-relatedregulationsinthePRC

mayadverselyafectourbusinesandresultsofoperations.

On28December2012,thePRCgovernmentenactedanewlabourlaw,namely,theNewLabour

ContractLawofthePRC(the“NewLabourContractLaw”),whichbecamefectiveon1July2013.

TheNewLabourContractLawestablishesaditionalrestrictionsandincreasesthecostoemployers

uponterminationofemployes,includingspecificprovisionsrelatedtofixed-termemployment

contracts,temporaryemployment,probation,consultationwiththelabourunionandemployegeneral

asembly,employmentwithoutacontract,dismisalofemployes,compensationuponterminationand

overtimework,andcolectivebargaining.AcordingtotheNewLabourContractLaw,anemployeris

obligatedtosignanunlimitedtermlabourcontractwithanemployeifthemployercontinuesto

employthemployeaftertwoconsecutivefixedtermlabourcontracts.Themployermustalsopay

compensationtoemployesifthemployerterminatesanunlimitedtermlabourcontract.Unlesan

employerefusestoextendthelabourcontractwiththemployeunderthesametermsorbeterterms

thanthoseintheoriginalcontract.Further,undertheRegulationsonPaidAnualLeaveforEmployes

whichbecamefectiveon1January2008,employeswhohaveservedmorethanoneyearwithan

employerarentitledtoapaidvacationrangingfromfiveto15days,dependingontheirlengthof

service.Employeswhowaivesuchvacationtimeatherequestofemployershalbecompensatedat

thretimestheirnormalsalariesforeachwaivedvacationday.Asaresultoftheseprotectivelabour

measuresoranyaditionalfuturemeasures,ourlabourcostsmayincrease.Therecanbenoasurance

thatanydisputes,workstopagesorstrikeswilnotariseinthefuture.

HigherlabourcostsandinflationinthePRCmayadverselyafectourprofitability.

LabourcostsinthePRChaveriseninrecentyearsasaresultofthenactmentofnewlabourlawsand

socialdevelopment.Risinglabourcostsandinflationmayincreaseouroperatingcostsandpartialy

erodethecostadvantageofourPRC-basedoperationsandthereforenegativelyimpactourprofitability.

RISKSRELATINGTOTHEBONDSANDTHEGUARANTE

TheIsuerisaspecialpurposefinancingentitywithnoperationofitsown.Itsabilitytomake

paymentsundertheBondswildependontimelypaymentsunderon-lentloansoftheprocedsfrom

theisueoftheBonds.

TheIsuerisaspecialpurposevehicleusedforthepurposeofraisingfundsthroughisuancesofbonds

andwilusethenetprocedsfromtheisuanceston-lendtotheGuarantorand/oritsubsidiariesor

asociates.Asuch,theIsuerhaslimitedasetsasrecourseforBondholders.TheIsuerdoesnotand

wilnothaveanybusinesactivitiesotherthanraisingindebtednes,anditsabilitytomakepayments

undertheBondswildependonitsreceiptoftimelyremitanceofundsfromtheGuarantorand/orits

subsidiariesandothermembersoftheGroup.

TheGuarantor’subsidiaries,jointlycontroledentitiesandasociatedcompaniesaresubjecto

restrictionsonthepaymentofdividendsandtherepaymentofintercompanyloansoradvancestothe

Guarantor,itsjointlycontroledentitiesandasociatedcompanies.

Asaholdingcompany,theGuarantorwildependonthereceiptofdividendsandtheinterestand

principalpaymentsonintercompanyloansoradvancesfromitsubsidiaries,jointlycontroledentities

andasociatedcompaniestosatisfyitsobligationsundertheGuarante.TheabilityoftheGuarantor’s

subsidiaries,jointlycontroledentitiesandasociatedcompaniestopaydividendsandmakepayments

onintercompanyloansoradvancestotheirshareholdersisubjecto,amongotherthings,distributable

earnings,cashflowconditions,restrictionscontainedinthearticlesofasociationofthesecompanies,

aplicablelawsandrestrictionscontainedinthedebtinstrumentsofsuchcompanies.Therecanbeno

asurancethatheGuarantor’subsidiaries,jointlycontroledentitiesandasociatedcompanieswil

havedistributablearningsorwilbepermitedtodistributetheirdistributablearningstoitasit

anticipates,oratal.Inadition,dividendspayabletoitbythesecompaniesarelimitedbythe

percentageofitsequityownershipinthesecompanies.Inparticular,theGuarantordoesnotmaintain

completecontroloveritsjointlycontroledentitiesorasociatesinwhichitmightholdaminority

interest.Further,ifanyofthesecompaniesraisescapitalbyisuingequitysecuritiestothirdparties,

dividendsdeclaredandpaidwithrespectosuchshareswouldnotbeavailabletotheGuarantortomake

paymentsundertheGuarante.ThesefactorscouldreducethepaymentsthatheGuarantoreceives

fromitsubsidiaries,jointlycontroledentitiesandasociatedcompanies,whichwouldrestrictits

abilitytometitspaymentobligationsundertheGuarante.

TheBondsandtheGuaranteareunsecuredobligations.

TheBondsandtheGuaranteareunsecuredobligationsoftheIsuerandtheGuarantor,respectively.

TherepaymentoftheBondsandpaymentundertheGuarantemaybeadverselyafectedif:

•theIsuerortheGuarantorentersintobankruptcy,liquidation,reorganisationorotherwinding-up

procedings;

•thereisadefaultinpaymentundertheIsuer’sortheGuarantor’sfuturesecuredindebtednesor

otherunsecuredindebtednes;or

•thereisanacelerationofanyoftheIsuer’sortheGuarantor’sindebtednes.

Ifanyoftheseventsweretocur,theIsuer’sortheGuarantor’sasetsmaynotbesuficientopay

amountsdueontheBonds.

TheBondsandtheGuarantewilbestructuralysubordinatedtothexistingandfuture

indebtednesandotherliabilitiesofeachoftheGuarantor’sexistingandfuturesubsidiaries(other

thantheIsuer),andefectivelysubordinatedtotheGuarantor’securedebtothextentofthe

valueofthecolateralsecuringsuchindebtednes.

TheBondsandtheGuarantewilbestructuralysubordinatedtoanyexistingandfuturedebtandother

liabilitiesandcomitments,includingtradepayablesandleaseobligations,oftheGuarantor’sexisting

andfuturesubsidiaries(otherthantheIsuer),whetherornotsecured.TheGuarantor’sobligations

undertheGuarantewilnotbeguarantedbyanyoftheGuarantor’subsidiaries,andtheGuarantor’s

abilitytomakepaymentsundertheGuarantedependspartlyonthereceiptofdividends,distributions,

interestoradvancesfromitsubsidiaries.Theabilityofsuchsubsidiariestopaydividendstothe

Guarantorisubjectovariousrestrictionsunderaplicablelaws.TheGuarantor’subsidiariesare

separatelegalentitiesthathavenobligationtopayanyamountsdueundertheGuaranteormakeany

fundsavailabletherefor,whetherbydividends,loansorotherpayments.TheGuarantor’srighto

receiveasetsofanyoftheGuarantor’subsidiaries,uponthatsubsidiary’sliquidationor

reorganisation,wilbefectivelysubordinatedtotheclaimofthatsubsidiary’screditors(exceptothe

extenthatheGuarantorisacreditorofthatsubsidiary).Consequently,theGuarantewilbe

efectivelysubordinatedtoaliabilities,includingtradepayablesandleaseobligations,ofanyofthe

Guarantor’subsidiariesandanysubsidiariesthatheGuarantormayinthefutureacquireorestablish.

TheoutstandingindebtednesofthesubsidiariesoftheGuarantormayalsocontaincovenants

restrictingtheabilityofsuchsubsidiariestopaydividendsincertaincircumstancesforsolongasuch

indebtednesremainsoutstanding.Moreover,theGuarantor’spercentageinterestsinitsubsidiariesand

jointventurescouldbereducedinthefuture.

TheBondsandtheGuarantearetheIsuer’sortheGuarantor’s(asthecasemaybe)unsecured

obligationsandwil(i)rankatleastequalyinrightofpaymentwithaltheGuarantor’sotherpresent

andfutureunsubordinatedandunsecuredindebtednes;and(i)befectivelysubordinatedtoalofthe

Guarantor’spresentandfuturesecuredindebtednestothextentofthevalueofthecolateralsecuring

suchobligations;and(i)beseniortoaloftheIsuer’sortheGuarantor’s(asthecasemaybe)present

andfuturesubordinatedobligations.Acordingly,claimsofsecuredlenders,whetherseniororjunior,

withrespectoasetsecuringtheirloanswiltakeprioritywithrespectothoseasets.Intheventof

theGuarantor’sbankruptcy,insolvency,liquidation,reorganisation,disolutionorotherwindingup,or

uponanyacelerationoftheBonds,theseasetswilbeavailabletopayobligationsontheGuarante

onlyafteralotherdebtsecuredbytheseasetshasbenrepaidinful.Anyremainingasetswilbe

availabletotheBondholdersrateablywithaloftheGuarantor’sotherunsecuredandunsubordinated

creditors,includingtradecreditors.Iftherearenotsuficientasetsremainingtopayalthesecreditors,

thenaloraportionoftheBondsthenoutstandingwouldremainunpaid.

TheBondsmaynotbeasuitableinvestmentforalinvestors.

EachpotentialinvestorinanyBondsmustdeterminethesuitabilityofthatinvestmentinlightofitsown

circumstances.Inparticular,eachpotentialinvestorshould:

•havesuficientknowledgeandexperiencetomakeameaningfulevaluationoftheBonds,the

meritsandrisksofinvestingintheBondsandtheinformationcontainedorincorporatedby

referenceinthisOferingCircular;

•haveacesto,andknowledgeof,apropriateanalyticaltolstoevaluate,inthecontextofits

particularfinancialsituation,aninvestmentintheBondsandtheimpactsuchinvestmentwilhave

onitsoveralinvestmentportfolio;

•havesuficientfinancialresourcesandliquiditytobearaloftherisksofaninvestmentinthe

Bonds;

•understandthoroughlythetermsoftheBondsandbefamiliarwiththebehaviourofanyrelevant

indicesandfinancialmarkets;and

•beabletoevaluate(eitheraloneorwiththehelpofafinancialadviser)posiblescenariosfor

economic,interestrateandotherfactorsthatmayafectitsinvestmentanditsabilitytobearthe

aplicablerisks.

TheBondsarecomplexfinancialinstrumentsandmaybepurchasedasawaytoreduceriskorenhance

yieldwithameasuredandapropriateaditionofrisktotheinvestor’soveralportfolios.Apotential

investorshouldnotinvestinBondswhicharecomplexfinancialinstrumentsunlesithasthexpertise

(eitheraloneorwiththehelpofafinancialadviser)toevaluatehowtheBondswilperformunder

changingconditions,theresultingefectsonthevalueofsuchBondsandtheimpacthisinvestmentwil

haveonthepotentialinvestor’soveralinvestmentportfolio.

Aditionaly,theinvestmentactivitiesofcertaininvestorsaresubjectolegalinvestmentlawsand

regulations,orevieworegulationbycertainauthorities.Eachpotentialinvestorshouldconsultits

legaladviserstodeterminewhetherandtowhatextent(a)Bondsarelegalinvestmentsforit,(b)Bonds

canbeusedascolateralforvarioustypesofborowingand(c)otherestrictionsaplytoitspurchase

ofanyBonds.Financialinstitutionshouldconsultheirlegaladvisersortheapropriateregulatorsto

determinetheapropriatetreatmentofBondsunderanyaplicablerisk-basedcapitalorsimilarules.

ModificationsandwaiversmaybemadeinrespectoftheTermsandConditionsoftheBonds,the

TrustDedandtheAgencyAgrementbytheTrusteorlesthanaloftheholdersoftheBonds.

TheTermsandConditionsoftheBondsprovidethatheTrustemay(butshalnotbeobligedto)agre,

withoutheconsentoftheBondholders,to(i)anymodification(otherthanaproposedmodification

relatedtothesubjectofcertainreservedmaters)oftheTermsandConditionsoftheBondsorany

provisionsoftheTrustDedortheAgencyAgrementwhichintheopinionoftheTrustewilnotbe

materialyprejudicialtotheinterestsofBondholdersand(i)anymodificationoftheTermsand

ConditionsoftheBondsoranyprovisionsoftheTrustDedortheAgencyAgrementwhichinthe

opinionoftheTrusteisofaformal,minorortechnicalnatureorismadetocorectamanifesteroror

tocomplywithanymandatoryprovisionoflaw.

Inadition,theTrustemay,withoutheconsentoftheBondholders,authoriseorwaiveanybreachor

proposedbreachoftheTermsandConditionsoftheBondsoranyprovisionsoftheTrustDedorthe

AgencyAgrementif,intheopinionoftheTruste,theinterestsoftheBondholderswilnotbe

materialyprejudicedthereby.

AtradingmarketfortheBondsmaynotdevelop.

TheBondsareanewisueofsecuritiesforwhichthereiscurentlynotradingmarket.Therecanbeno

asuranceastotheliquidityoftheBondsorthatanactivetradingmarketwildevelop.Ifsuchamarket

weretodevelop,theBondscouldtradeatpricesthatmaybehigherorlowerthantheinitialisueprice

dependingonmanyfactors,includingprevailinginterestrates,theGroup’soperationsandthemarket

forsimilarsecurities.Althoughaplicationwilbemadeforthelistingof,andpermisiontodealin,the

BondsontheHongKongStockExchange,suchlistingcangivenoasuranceastotheliquidityof,or

tradingmarketfor,theBonds.TheManagersarenotobligatedtomakeamarketintheBondsandany

suchmarketmaking,ifcomenced,maybediscontinuedatanytimeathesolediscretionofthe

Managers.Inadition,theBondsarebeingoferedpursuantoexemptionsfromregistrationunderthe

SecuritiesActand,asaresult,theholdersoftheBondswilonlybeabletoreseltheBondsin

transactionsthathavebenregisteredundertheSecuritiesActorintransactionsnotsubjector

exemptfromregistrationundertheSecuritiesAct.Itisinvestors’obligationtoensurethatofersand

salesoftheBondswithinanycountriescomplywithaplicablesecuritieslaws.Pleasese

“SubscriptionandSale”.NeithertheIsuernortheGuarantorcanpredictwhetheranactivetrading

marketfortheBondswildeveloporbesustained.

TheBondsmayberedemedbytheIsuerpriortomaturity.

TheBondsmayberedemedatheoptionoftheIsuerinwhole,butnotinpart,atheirprincipal

amountogetherwithanyinterestacruedto,butexcluding,thedatefixedforedemptionif,subjecto

certainconditions,asaresultofachangeintaxlaw,theIsuer(or,iftheGuarantewerecaled,the

Guarantor)hasorwilbecomeobligedtopayAditionalTaxAmounts(asdefinedintheTermsand

ConditionsoftheBonds),asfurtherdescribedinCondition6(b)oftheTermsandConditionsofthe

Bonds.

IftheIsueredemstheBondspriortotheirmaturitydates,investorsmaynotreceivethesame

economicbenefitstheywouldhavereceivedhadtheyheldtheBondstomaturity,andtheymaynotbe

abletoreinvestheprocedstheyreceiveinaredemptioninsimilarsecurities.Inadition,theIsuer’s

abilitytoredemtheBondsmayreducethemarketpriceoftheBonds.

IftheGuarantororanyofitsubsidiaries,includingtheIsuer,isunabletocomplywiththe

restrictionsandcovenantsintheirespectivedebtagrements(ifany),ortheBonds,asaplicable,

therecouldbeadefaultunderthetermsoftheseagrements,ortheBonds,asaplicable,which

couldcauserepaymentofthedebtoftheGuarantororanyofitsubsidiariestobeacelerated.

IftheGuarantororanyofitsubsidiaries,includingtheIsuer,isunabletocomplywiththerestrictions

andcovenantsintheBonds,orcurentorfuturedebtobligationsandotheragrements(ifany),there

couldbeadefaultunderthetermsoftheseagrements.Intheventofadefaultundertheseagrements,

theholdersofthedebtcouldterminatetheircomitmentstolendtotheGuarantororanyofits

subsidiaries,includingtheIsuer,aceleraterepaymentofthedebt,declarealamountsborowedue

andpayableorterminatetheagrements,asthecasemaybe.Furthermore,someofthosedebt

agrementsandtheBondscontainormaycontaincros-acelerationorcros-defaultprovisions.Asa

result,thedefaultbytheGuarantororanyofitsubsidiariesunderonedebtagrementmaycausethe

acelerationofrepaymentofnotonlysuchbutotherdebt,includingtheBonds,oresultinadefault

underitsotherdebtagrements,includingtheBonds.Ifanyoftheseventsocur,therecanbeno

asurancethatherewouldbesuficientasetsandcashflowsoftheGuarantororanyofitsubsidiaries

torepayinfulaloftheirespectiveindebtednes,orthatitwouldbeabletofindalternativefinancing.

EveniftheGuarantoranditsubsidiariescouldobtainalternativefinancing,therecanbenoasurance

thatitwouldbeontermsthatarefavourableoraceptabletotheGuarantoranditsubsidiaries.

TheliquidityandpriceoftheBondsfolowingthisoferingmaybevolatile.

ThepriceandtradingvolumeoftheBondsmaybehighlyvolatile.Factorsuchasvariationsinthe

revenues,earningsandcashflowsoftheGroupandproposalsofnewinvestments,strategicaliances

and/oracquisitions,interestratesandfluctuationsinpricesforcomparablecompanies,changesin

governmentregulationsandanyadversechangeintheresultsofoperationscouldcausethepriceofthe

Bondstochange.Anysuchdevelopmentsmayresultinlargeandsudenchangesinthevolumeand

priceatwhichtheBondswiltrade.Therecanbenoasurancethathesedevelopmentswilnotocurin

thefuture.

Developmentsintheinternationalfinancialmarketsandworldeconomiconditionsmayadversely

afecthemarketpriceoftheBonds.

ThemarketpriceoftheBondsmaybeadverselyafectedbydeclinesintheinternationalfinancial

marketsandworldeconomiconditions.ThemarketfortheBondsis,tovaryingdegres,influencedby

economicandmarketconditionsinothermarkets,especialythoseinAsia.Althougheconomic

conditionsarediferentineachcountry,investors’reactionstodevelopmentsinonecountrycanafect

thesecuritiesmarketsandthesecuritiesofisuersinothercountries,includingChina.Sincetheglobal

financialcrisisof2008and2009andinmorerecentimes,theinternationalfinancialmarketshave

experiencedsignificantvolatility.Ifsimilardevelopmentsocurintheinternationalfinancialmarketsin

thefuture,themarketpriceoftheBondscouldbeadverselyafected.

ChangesininterestratesmayadverselyafecthevalueoftheBonds.

TheBondholdersmaysuferunforesenlosesduetofluctuationsininterestrates.Generaly,arisein

interestratesmaycauseafalinthepricesoftheBonds,resultinginacapitalosfortheBondholders.

However,theBondholdersmayreinvestheinterestpaymentsathigherprevailinginterestrates.

Conversely,wheninterestratesfal,thepricesoftheBondsmayrise.TheBondholdersmayenjoya

capitalgainbutinterestpaymentsreceivedmaybereinvestedatlowerprevailinginterestrates.

TheBondswilcaryafixedinterestrate.Consequently,investmentintheBondsinvolvestheriskthat

subsequentchangesinmarketinterestratesmayadverselyafecthevalueoftheBonds.IfBondholders

seltheBondstheyholdbeforethematurityofsuchBonds,theymayreceiveanoferlesthantheir

investment.

InvestmentintheBondsisubjectoexchangeraterisks.

TheBondsaredenominatedandpayableinU.S.dolars.IfaBondholdermeasuresitsinvestment

returnsbyreferencetoacurencyotherthanU.S.dolars,aninvestmentintheBondsentailsforeign

exchangerelatedrisks,includingchangesinthevalueofU.S.dolarsrelativetothecurencyby

referencetowhichaninvestormeasuresitsinvestmentreturns,suchrisksarisingfrom,amongother

things,economic,politicalandotherfactorsoverwhichtheGrouphasnocontrol.Depreciationofthe

U.S.dolarsagainstsuchcurencycouldcauseadecreaseinthefectiveyieldoftheBondsbelowtheir

statedcouponratesandcouldresultinaloswhenthereturnontheBondsistranslatedintosuch

curency.Inadition,theremaybetaxconsequencesforBondholdersasaresultofanyforeign

curencygainsresultingfromanyinvestmentintheBonds.

TheIsuerortheGuarantormaynotbeabletoredemtheBondsupontheduedateforedemption

thereof.

FolowingtheocurenceofaChangeofControl(asdefinedintheTermsandConditionsoftheBonds),

theIsuermay,atheoptionofanyBondholder,berequiredtoredemal,butnotsomeonly,ofsuch

Holder’sBondsat101percent.oftheirprincipalamount,togetherwithacruedinterest.Ifsuchan

eventweretocur,theIsuermaynothavesuficientcashinhandandmaynotbeabletoarange

financingtoredemtheBondsintime,oronaceptableterms,oratal.Therecanbealsonoasurance

thatheGuarantorwouldhavesuficientliquidityatsuchtimetomaketherequiredredemptionofthe

Bonds.TheabilitytoredemtheBondsinsucheventmayalsobelimitedbythetermsofotherdebt

instruments.TheIsuer’sandtheGuarantor’sfailuretorepay,repurchaseoredemtenderedBonds

couldconstituteaneventofdefaultundertheBonds,whichmayalsoconstituteadefaultunderthe

termsoftheIsuer’s,theGuarantor’sorourotherindebtednes.

AchangeinEnglishlawhichgovernstheBondsmayadverselyafectholdersoftheBonds.

TheTermsandConditionsoftheBondsaregovernedbyEnglishlaw.Noasurancecanbegivenasto

theimpactofanyposiblejudicialdecisionorchangeofEnglishlaworadministrativepracticeafterthe

dateofisueoftheBonds.

AditionalproceduresmayberequiredtobetakentobringEnglishlawgovernedmatersordisputes

totheHongKongcourtsandtheBondholderswouldnedtobesubjectothexclusivejurisdictionof

theHongKongcourts.TherecanalsobenoasurancethathePRCcourtswilrecogniseand

enforcejudgmentsoftheHongKongcourtsinrespectofEnglishlawgovernedmatersordisputes.

TheTermsandConditionsoftheBonds,theTrustDedandtheAgencyAgrementaregovernedby

Englishlaw,whereaspartiestothesedocumentshavesubmitedtothexclusivejurisdictionofthe

HongKongcourts.InordertohearEnglishlawgovernedmatersordisputes,theHongKongcourts

mayrequirecertainaditionalprocedurestobetaken.UndertheChoiceofCourtArangement,

judgmentsofHongKongcourtsarelikelytoberecognisedandenforcedbythePRCcourtswherethe

contractingpartiestothetransactionspertainingtosuchjudgmentshaveagredtosubmitothe

exclusivejurisdictionofHongKongcourts.

Unlikeotherbondsisuedintheinternationalcapitalmarketswhereholdersofsuchbondswould

typicalynotberequiredtosubmitoanexclusivejurisdiction,theBondholderswilbedemedtohave

submitedtothexclusivejurisdictionoftheHongKongcourts.Thus,theBondholders’abilityto

initiateaclaimoutsideHongKongwilbelimited.

Underthe2019Arangement,wheretheHongKongcourthasgivenalegalyefectivejudgmentina

civilandcomercialmater,anypartyconcernedmayaplytotherelevantPeople’sCourtofthe

Mainlandforecognitionandenforcementofthejudgment,subjectotheprovisions,limits,procedures

andothertermsandrequirementsofthe2019ArangementandtheJudicialInterpretation.The

recognitionandenforcementofaHongKongcourtjudgmentcouldberefusediftherelevantPeople’s

CourtoftheMainlandconsiderthathenforcementofsuchjudgmentiscontrarytothebasicprinciples

oflawoftheMainlandorthesocialandpublicinterestsoftheMainland.Whileitisexpectedthathe

relevantPeople’sCourtsoftheMainlandwilrecogniseandenforceajudgmentgivenbyaHongKong

courtandgovernedbyEnglishlaw,therecanbenoasurancethatsuchcourtswildosoforalsuch

judgmentsasthereisnoestablishedpracticeinthisarea.

TheBondswilinitialyberepresentedbytheGlobalCertificateandholdersofabeneficialinterest

intheGlobalCertificatemustrelyontheproceduresoftherelevantClearingSystem.

TheBondswilinitialyberepresentedbytheGlobalCertificate.SuchGlobalCertificatewilbe

depositedwithacomondepositaryforEuroclearandClearstream(eachofEuroclearandClearstream,

a“ClearingSystem”).ExceptinthecircumstancesdescribedintheGlobalCertificate,investorswil

notbentitledtoreceivedefinitiveBonds.TherelevantClearingSystemwilmaintainrecordsofthe

beneficialinterestsintheGlobalCertificate.

WhiletheBondsarerepresentedbytheGlobalCertificate,investorswilbeabletotradetheir

beneficialinterestsonlythroughtheClearingSystems.WhiletheBondsarerepresentedbytheGlobal

Certificate,theIsuerwildischargeitspaymentobligationsundertheBondsbymakingpaymentsto

thecomondepositaryforEuroclearandClearstream,fordistributiontotheiracountholders.A

holderofabeneficialinterestintheGlobalCertificatemustrelyontheproceduresoftherelevant

ClearingSystemtoreceivepaymentsundertheBonds.TheIsuerhasnoresponsibilityorliabilityfor

therecordsrelatingto,orpaymentsmadeinrespectof,beneficialinterestsintheGlobalCertificate.

HoldersofbeneficialinterestsintheGlobalCertificatewilnothaveadirectrightovoteinrespectof

theBonds.Instead,sucholderswilbepermitedtoactonlytothextenthatheyarenabledbythe

relevantClearingSystemtoapointapropriateproxies.

TheTrustemayrequestholdersoftheBondstoprovideanindemnityand/orsecurityand/or

prefundingtoitsatisfaction.

Incertaincircumstances,includingwithoutlimitationthegivingofnoticetotheIsuerandthe

GuarantorpursuantoCondition9oftheTermsandConditionsoftheBondsandthetakingofanysuch

stepsand/oractionsand/ortheinstitutingofanysuchprocedingspursuantoCondition13ofthe

TermsandConditionsoftheBonds,theTrustemayrequestholdersoftheBondstoprovidean

indemnityand/orsecurityand/orprefundingtoitsatisfactionbeforeitakesanysuchstepsand/or

actionsand/orinstitutesanysuchprocedingsonbehalfofholdersoftheBonds.TheTrusteshalnot

beobligedtotakeanysuchstepsand/oractionsand/orinstituteanysuchprocedingsifnotfirst

indemnifiedand/orsecuredand/orprefundedtoitsatisfaction.Negotiatingandagreingtoan

indemnityand/orsecurityand/orprefundingcanbealengthyprocesandmayimpactonwhensuch

actionscanbetaken.TheTrustemaynotbeabletotakeanysuchstepsand/oractionsand/orinstitutes

anysuchprocedings,notwithstandingtheprovisionofanindemnityand/orsecurityand/orprefunding

toit,inbreachofthetermsoftheTrustDedortheTermsandConditionsoftheBondsandinsuch

circumstances,orwherethereisuncertaintyordisputeastotheaplicablelawsoregulations,tothe

extentpermitedbytheagrementsandtheaplicablelaw,itwilbefortheholdersoftheBondstotake

suchactionsdirectly.

DecisionsthatmaybemadeonbehalfofalholdersoftheBondsmaybeadversetotheinterestsof

individualholdersoftheBonds.

TheTrustDedcontainsprovisionsforconveningmetingsofholdersoftheBondstoconsiderany

matersafectingtheirinterests.Theseprovisionspermitdefinedmajoritiestobindalholdersofthe

Bondsincludingholderswhodidnotatendandvoteatherelevantmetingandholderswhovotedina

manercontrarytothemajority.Furthermore,thereisariskthathedecisionofthemajorityofthe

holdersoftheBondsmaybeadversetotheinterestsoftheindividuals.

GainsonthetransferoftheBondsmaybesubjectoincometaxunderPRCtaxlaws.

UndertheEnterpriseIncomeTaxLawofthePRC(the“EITLaw”)whichtokefecton29December

2018anditsimplementationrules,anygainsrealisedonthetransferoftheBondsbyholderswhoare

demedundertheEITLawasnon-residententerprisesmaybesubjectoPRCenterpriseincometaxif

suchgainsareregardedasincomesderivedfromsourceswithinthePRC.UndertheEITLaw,a

“non-residententerprise”meansanenterprisestablishedunderthelawsofajurisdictionotherthanthe

PRCandwhoseactualadministrativeorganisationisnotinthePRC,whichasestablishedoficesor

premisesinthePRC,orwhichasnotestablishedanyoficesorpremisesinthePRCbuthasobtained

incomesderivedfromsourceswithinthePRC.Inadition,thereisuncertaintyastowhethergains

realisedonthetransferoftheBondsbyindividualholderswhoarenotPRCcitizensoresidentswilbe

subjectoPRCindividualincometax.IfsuchgainsaresubjectoPRCincometax,the10percent.

enterpriseincometaxrateand20percent.individualincometaxratewilperhapsaplyrespectively

unlesthereisanaplicabletaxtreatyorarangementhatreducesorexemptsuchincometax.The

taxableincomewilbethebalanceofthetotalincomeobtainedfromthetransferoftheBondsminusal

costsandexpensesthatarepermitedunderPRCtaxlawstobedeductedfromtheincome.Acordingto

anarangementbetwenmainlandChinandHongKongforavoidanceofdoubletaxation,Bondholders

whoareHongKongresidents,includingbothenterpriseholdersandindividualholders,wilbe

exemptedfromPRCincometaxoncapitalgainsderivedfromasaleorexchangeoftheBonds.

IfaBondholder,beinganon-residententerpriseornon-residentindividual,isrequiredtopayanyPRC

incometaxongainsonthetransferoftheBonds,thevalueoftherelevantBondholder’sinvestmentin

theBondsmaybematerialyandadverselyafected.

TheinsolvencylawsoftheBritishVirginIslandsandtheCaymanIslandsandotherlocalinsolvency

lawsmaydiferfromthoseofanotherjurisdictionwithwhichtheholdersoftheBondsarefamiliar.As

theIsuerandtheGuarantorareincorporatedunderthelawsoftheBritishVirginIslandsandthe

CaymanIslands,respectively,anyinsolvencyprocedingrelatingtotheIsuerortheGuarantorwould

likelyinvolveBritishVirginIslandsorCaymanIslands’insolvencylaws,respectively,theprocedural

andsubstantiveprovisionsofwhichmaydiferfromcomparableprovisionsofthelocalinsolvencylaws

ofjurisdictionswithwhichtheholdersoftheBondsarefamiliar.

TheBondsareredemableintheventofcertainwitholdingtaxesbeingaplicable.

NoasurancesaremadebytheIsuerastowhetherornotpaymentsontheBondsmaybemadewithout

witholdingtaxesordeductionsaplyingfromtheIsueDateonacountofanytaxes,duties,

asesmentsorgovernmentalchargesofwhatevernatureimposed,levied,colected,witheldor

asesedbythePRCoranysubdivisionorauthoritythereinorthereofhavingpowertotax.Although

pursuantotheTermsandConditionsoftheBondstheIsuerisrequiredtogrosupaymentson

acountofanysuchwitholdingtaxesordeductions,theIsueralsohastherightoredemtheBonds

atanytimeintheventithasorwilbecomeobligedtopayaditionalamountsonacountofany

existingorfuturewitholdingordeductionforanytaxes,duties,asesmentsorgovernmentalcharges

ofwhatevernatureimposed,levied,colected,witheldorasesedbythePRC,oranypolitical

subdivisionoranyauthoritythereinorthereofhavingpowertotaxasaresultofanychangein,or

amendmento,thelawsoregulationsofthePRCoranypoliticalsubdivisionoranyauthoritytherein

orthereofhavingpowertotax,oranychangeintheaplicationoroficialinterpretationofsuchlawsor

regulations(includingaholdingbyacourtofcompetentjurisdiction),whichchangeoramendment

becomesefectiveonorafter11August2025.

AtaxforwitholdingmaybepayableundertheUnitedStatesForeignAcountTaxComplianceAct

(“FATCA”)ifaninvestororcustodianoftheBondsisunabletoreceivepaymentsfreof

witholding.

WhilstheBondsareinglobalformandheldwithintheClearingSystems,inalikelycircumstances,it

isnotexpectedthatFATCA,ascurentlyimplemented,wilafectheamountofanypaymentreceived

bytheClearingSystemsontheBonds(se“Taxation–FATCA”).However,FATCAmayafect

payments(includingpaymentsofprincipal,interestandanypremiumonBondsandsalesprocedsfrom

Bonds)madetocustodiansorintermediariesinthesubsequentpaymentchainleadingtotheultimate

investorifanysuchcustodianorintermediarygeneralyisunabletoreceivepaymentsfreofFATCA

witholding.Italsomayafectpaymentsto,amongothersanyultimateinvestorthatisafinancial

institutionthatisnotentitledtoreceivepaymentsfreofwitholdingunderFATCA,oranultimate

investorthatfailstoprovideitsbroker(orothercustodianorintermediaryfromwhichitreceives

payment)withanyinformation,forms,otherdocumentationorconsentsthatmaybenecesaryforthe

paymentstobemadefreofFATCAwitholding.Investorshouldchosethecustodiansor

intermediarieswithcare(toensureachiscompliantwithFATCAorotherlawsoragrementsrelated

toFATCA),andprovideachcustodianorintermediarywithanyinformation,forms,other

documentationorconsentsthatmaybenecesaryforsuchcustodianorintermediarytomakeapayment

freofFATCAwitholding.TheobligationsoftheIsuerandtheGuarantorundertheBondsorthe

Guarante,asthecasemaybe,aredischargedoncetheIsuerortheGuarantorhasmadepaymentsto,or

totheorderof,thecomondepositaryfortheClearingSystems(asregisteredholderoftheBonds)and

theIsuerandGuarantorhavethereforenoresponsibilityforanyamounthereaftertransmitedthrough

theClearingSystemsandcustodiansorintermediaries.Further,whileforeignfinancialinstitutionsina

jurisdictionwhichasenteredintoa“Model1”inter-governmentalagrementwiththeUnitedStates

(an“IGA”)maygeneralynotbexpectedtoberequiredtowitholdundercurentFATCArulesoran

IGA(oranylawimplementinganIGA)frompaymentstheymake,therecanbenoasurancesthat

FATCAwitholdingwouldnotafecthepaymentsreceivedbyaninvestorinrespectoftheBonds.In

theventhatBondsweretobecomeisuedindefinitiveform,aditionalFATCAconsiderationsmay

aply.Furthermore,itisposiblethatheUnitedStatesmaysubsequentlyintroduceaditionalrules

relatingtoFATCAthatafectwitholding,includingwithrespecto“foreignpasthroughpayments”.

Prospectiveinvestorshouldconsultheirowntaxadvisertobtainamoredetailedexplanationof

FATCAandhowFATCAmayafecthemandtheirinvestmentin,andacquisitionandsaleof,Bonds.

BondholdershouldbeawarethatadefinitiveCertificatewhichasaprincipalamounthatisnotan

integralmultipleoftheminimumspecifiedenominationmaybeiliquidandificultotrade.

InrelationtoanyBondwhichasaprincipalamountconsistingofaminimumspecifiedenomination

plusahigherintegralmultipleofanothersmaleramount,itisposiblethatheBondsmaybetradedin

amountsinexcesoftheminimumspecifiedenominationthatarenotintegralmultiplesofsuch

minimumspecifiedenomination.InsuchacaseaBondholderwho,asaresultoftradingsuchamounts,

holdsaprincipalamountoflesthantheminimumspecifiedenominationwilnotreceiveadefinitive

Certificateinrespectofsucholding(shouldefinitiveBondsbeprinted)andwouldnedtopurchasea

principalamountofBondsuchthatitholdsanamountequaltoneormorespecifiedenominations.If

definitiveBondsareisued,holdershouldbeawarethatadefinitiveCertificatewhichasaprincipal

amounthatisnotanintegralmultipleoftheminimumspecifiedenominationmaybeiliquidand

dificultotrade.

TheIsuermayisueaditionalsecuritiesinthefuture.

TheIsuermayfromtimetotimewithoutheconsentoftheBondholderscreateandisuefurther

securitieshavingthesametermsandconditionsastheBondsinalrespects(orinalrespectsexceptfor

theisuedate,thefirstpaymentofinterestonthem)orotherwiseraiseaditionalcapitalthroughsuch

meansandinsuchmanerasitmayconsidernecesary.Therecanbenoasurancethatsuchfuture

isuanceorcapitalraisingactivitywilnotadverselyafecthemarketpriceoftheBonds.Theisueof

anysuchdebtsecuritiesmayalsoreducetheamountrecoverablebyinvestorsintheBondsuponthe

Isuer’sbankruptcy,winding-uporliquidation.

TheIsuerand/ortheGuarantormayberequiredtocomplywithPRCfilingandregistration

requirementswithrespectotheBondsinthefuture.

TheNationalDevelopmentandReformComisionofthePeople’sRepublicofChina(中华人民共和

国家发展和改革委员会)(the“NDRC”)isuedtheAdministrativeMeasuresfortheReviewand

RegistrationofMedium-andLong-termForeignDebtsofEnterprises(企业中长期外债审核登记管理

办法)(国家发展和改革委员会令第56号)on5January2023andwhichcameintoefecton10February

2023(the“NDRCAdministrativeMeasures”).AcordingtotheNDRCAdministrativeMeasures,

domesticenterprisesandtheiroverseascontroledentitieshalprocuretheregistrationofanyforeign

debtsecuritieswithatermnotlesthanoneyearisuedwiththeNDRCpriortotheisueofthe

securities,andreportheparticularsoftherelevantisueswithinthetimeframeprescribedbytheNDRC

afterthecompletionoftherelevantisue,andtocomplywiththecontinuingobligationsunderthe

NDRCAdministrativeMeasures.Tothextenthereisanyrequirementoregisterormakeanyfiling

withrespectotheBonds,theIsuerand/ortheGuarantorhaveundertakenintheTrustDedtodulyand

punctualycomplywithorprocurethathereiscompliancewithalfiling,registration,reportingand

similarequirementsrequiredinacordancewithaplicablelawandregulationsfromtimetotime,

includinganyPRCregulatoryrequirement,relatingtotheBonds.

TheGuarantor’scorporateratingsmaybedowngradedorwithdrawninthefuture.

TheGuarantoreceivedacorporateratingofaninvestment-gradeinternationalratingof“Ag-”witha

stableoutlokfromChinaChengxin.TheBondsandtheGuarantehavenotbenrated.Aratingisnota

recomendationtobuy,selorholdtheBondsandmaybesubjectorevision,qualification,

suspension,reductionorwithdrawnatanytime.Therecanbenoasurancethataratingwilremainfor

anygivenperiodoftimeorthataratingwilnotbeloweredorwithdrawnentirelybytherelevantrating

agencyifinitsjudgmentcircumstancesinthefuturesowarant.TheIsuerortheGuarantorisnot

obligedtoinformBondholdersofanysuchrevision,downgradeorwithdrawal.Eachratingshouldbe

evaluatedindependentlyofanyothersecuritiesoftheIsuerortheGuarantor.Arevision,qualification,

suspensionorwithdrawalatanytimeofanyratingasignedtotheGuarantormayadverselyafecthe

marketpriceoftheBonds.

USEOFPROCEDS

ThegrosprocedsoftheisueoftheBondsarestimatedtobeU.S.$160.0milionbeforededucting

underwritingcomisionandexpensesinrelationtotheofering.Thenetprocedswilbeon-lento

theGuarantorforaircraftacquisitions,businesexpansioninaircraftandrelatedbusinesandgeneral

corporatepurposes.

CAPITALISATIONANDINDEBTEDNESOFTHEGUARANTOR

ThefolowingtablesetsoutheGuarantor’sconsolidatedcapitalisationandindebtednesasat31

December2024andasadjustedtogivefectotheisuanceoftheBonds.Foraditionalinformation,

setheAuditedConsolidatedFinancialStatementsandrelatednotestheretoincludedelsewhereinthis

OferingCircular.

ThistableshouldbereadinconjunctionwiththeAuditedConsolidatedFinancialStatementsandrelated

notestheretoincludedelsewhereinthisOferingCircular.ExceptasdisclosedinthisOferingCircular

aswelas(i)theisuanceof5-yearcorporatebondsofRMB1.5bilionwithcouponrateof2.38%per

anumbyCALC(Tianjin),theGuarantor’sonshoresubsidiary,inFebruary2025;(i)theupsizeofour

warehousefacilitiesfromUS$400miliontoUS$700milioninMarch2025;and(i)theisuanceof

perpetualmedium-termnotesofRMB500milionwithcouponrateof2.48%peranumbyCALC

(Tianjin)inApril2025,therehasbenomaterialadversechangetothecapitalisationorindebtednes

oftheGuarantorsince31December2024.

Asat31December2024

ActualAsadjusted

(HK$milion)(U.S.$milion)

(1)

(HK$milion)(U.S.$milion)

(1)

(Audited)(Unaudited)(Unaudited)(Unaudited)

Interest-bearingdebts–curentportion

Borowings.12,732.71,639.212,732.71,639.2

Medium-termnotes.10.51.410.51.4

Bondsandebentures.1,542.9198.61,542.9198.6

14,286.11,839.214,286.11,839.2

Interest-bearingdebts–non-curentportion

Borowings.30,313.53,902.530,313.53,902.5

Medium-termnotes.1,589.2204.61,589.2204.6

Bondsandebentures.2,387.8307.42,387.8307.4

Bondstobeisued

(2)

.–1,242.8160.0

34,290.54,414.535,533.34,574.5

Totalequity.5,328.2685.95,328.2685.9

Totalcapitalisation

(3)

.53,904.86,939.655,147.67,099.6

Notes:

(1)TranslationofHongKongdolaramountoU.S.dolaramountweremadeatarateofHK$7.7677toU.S.$1.00,thenon

buyingrateinefecton31December2024asetforthintheH.10weklystatisticalreleaseoftheBoardofGovernorsof

theFederalReserveSystemoftheUnitedStates.

(2)RepresentingtheagregateprincipalamountoftherelevantseriesofBondstobeisued,withoutakingintoacountand

beforedeductionofanyfes,comisionorexpenses.

(3)Totalcapitalisationcomprisescurentandnon-curentinterest-bearingdebtsandtotalequity.

(4)Theremaybeaslightlydiscrepancybetwenthesumofindividualitemsandthetotalashowninthetablesowingto

rounding.

TERMSANDCONDITIONSOFTHEBONDS

Thefolowing,subjectothemodificationandotherthanthewordsinitalics,isthetextoftheTerms

andConditionsoftheBondswhichwilapearonthereverseofeachofthedefinitivecertificates

representingtheBonds:

TheisueoftheU.S.$160,000,0006.0percent.guarantedbondsdue2028(the“Bonds”whichterm

shalinclude,unlesthecontextrequiresotherwise,anyfurtherbondsisuedinacordancewith

Condition15andtobeconsolidatedandformingasingleseriestherewith)wasauthorisedbya

resolutionoftheboardofdirectorsofCALCBondsLimited(the“Isuer”)pasedon31July2025.The

Bondsareconstitutedbyatrustdedated14August2025(the“TrustDed”)betwentheIsuer,

ChinaAircraftLeasingGroupHoldingsLimited(the“Guarantor”)andCNCBITrusteLimited(the

“Truste”,whichexpresionshalincludeitsucesor(s)andalpersonsforthetimebeingthetruste

ortrustesundertheTrustDed)astrusteforitselfandtheholdersoftheBonds.TheBondsarethe

subjectofanagencyagrementdated14August2025(the“AgencyAgrement”)betwentheIsuer,

theGuarantor,theTruste,ChinaCITICBankInternationalLimitedasinitialprincipalpayingagent

(the“PrincipalPayingAgent”,whichexpresionshalincludeanysucesorprincipalpayingagent

apointedfromtimetotimeinconectionwiththeBondsand,togetherwithanyotherpayingagents

apointedundertheAgencyAgrement,the“PayingAgents”),asregistrar(the“Registrar”,which

expresionshalincludeanysucesoregistrarapointedfromtimetotimeinconectionwiththe

Bonds)andastransferagent(the“TransferAgent”,whichexpresionshalincludeanysucesor

transferagentapointedfromtimetotimeinconectionwiththeBonds)andanyotheragentsnamedin

it.Referenceshereinto“Agents”meansthePrincipalPayingAgent,theRegistrar,theTransferAgents

andanyotheragentoragentsapointedfromtimetotimepursuantotheAgencyAgrementwith

respectotheBonds.

ThegivingoftheGuarante(asdefinedinCondition3(a)wasauthorisedbyaresolutionoftheboard

ofdirectorsoftheGuarantorpasedon17December2024.TheBondholders(asdefinedbelow)are

entitledtothebenefitof,areboundby,andaredemedtohavenoticeof,altheprovisionsoftheTrust

Ded,andaredemedtohavenoticeofalthoseprovisionsaplicabletothemoftheAgency

Agrement.ThestatementsintheseConditions(asdefinedbelow)includesumariesof,andare

subjecto,thedetailedprovisionsoftheTrustDed.

CopiesoftheTrustDedandtheAgencyAgrementareavailable(i)forinspectionbytheBondholders

atalreasonabletimesduringusualbusineshours(beingbetwen9:00amto3:00pm(HongKong

time)fromMondaytoFriday(otherthanpublicholidays)atheprincipaloficeoftheTruste(being

atheIsueDateat80/F,InternationalComerceCentre,1AustinRoadWest,Kowlon,HongKong)

andathespecifiedoficeforthetimebeingofthePrincipalPayingAgent,and(i)electronicalytoa

requestingBondholder,ineachcaseuponpriorwritenrequestandprofofholdingandidentitytothe

satisfactionoftheTrusteor,asthecasemaybe,thePrincipalPayingAgent.

Alcapitalisedtermsthatarenotdefinedinthesetermsandconditions(the“Conditions”)wilhavethe

meaningsgiventothemintheTrustDed.

1.FORM,SPECIFIEDENOMINATIONANDTITLE

TheBondsareisuedinthespecifiedenominationofU.S.$200,000andintegralmultiplesof

U.S.$1,000inexcesthereof(the“AuthorisedDenomination”).

TheBondsarerepresentedbyregisteredcertificates(“Certificates”)and,saveasprovidedin

Condition2(a),eachCertificateshalrepresenthentireholdingofBondsbythesameholder.

TitletotheBondshalpasbyregistrationintheregisterthatheIsuershalprocuretobekept

bytheRegistrarinacordancewiththeprovisionsoftheAgencyAgrement(the“Register”).

Exceptasorderedbyacourtofcompetentjurisdictionorasrequiredbylaw,theholder(asdefined

below)ofanyBondshalbedemedtobeandshalbetreatedasitsabsoluteownerforal

purposeswhetherornotitisoverdueandregardlesofanynoticeofownership,trustorany

interestinit,anywritingontheCertificaterepresentingitorthetheftorlosofsuchCertificate

andnopersonshalbeliableforsotreatingtheholder.

IntheseConditions,“Bondholder”and“holder”meanthepersoninwhosenameaBondis

registeredintheRegister(orinthecaseofajointholding,thefirstnamedthereof).

Uponisue,theBondswilberepresentedbyaglobalcertificate(the“GlobalCertificate”)

registeredinthenameofanomineof,andepositedwith,acomondepositaryforEuroclear

BankSA/NVandClearstreamBankingS.A.TheseConditionsaremodifiedbycertainprovisions

containedintheGlobalCertificate.Se“SumaryofProvisionsRelatingtotheBondsinGlobal

Forms”.

ExceptinthelimitedcircumstancesdescribedintheGlobalCertificate,ownersofinterestsin

BondsrepresentedbytheGlobalCertificatewilnotbentitledtoreceivedefinitiveCertificatesin

respectoftheirindividualholdingsofBonds.TheBondsarenotisuableinbearerform.

2.TRANSFERSOFBONDSANDELIVERYOFNEWCERTIFICATES

(a)Transfer

AholdingofBondsmay,subjectotheAgencyAgrementandConditions2(d)and2(e),be

transferedinwholeorinpartintheAuthorisedDenominationuponthesurender(athe

specifiedoficeoftheRegistraroranyTransferAgent)oftheCertificate(s)representing

suchBondstobetransfered,togetherwiththeformoftransferendorsedonsuch

Certificate(s)(oranotherformoftransfersubstantialyinthesameformandcontainingthe

samerepresentationsandcertifications(ifany),unlesotherwiseagredbytheIsuer),duly

completedandexecutedandanyotherevidenceastheRegistrarortherelevantTransfer

Agent(asthecasemaybe)mayrequire.Inthecaseofatransferofpartonlyofaholdingof

BondsrepresentedbyoneCertificate,anewCertificateshalbeisuedtothetransferein

respectofthepartransferedandafurthernewCertificateinrespectofthebalanceofthe

holding(whichmustbeinanAuthorisedDenomination)notransferedshalbeisuedtothe

transferor.InthecaseofatransferofBondstoapersonwhoisalreadyaholderofBonds,a

newCertificaterepresentingthenlargedholdingshalonlybeisuedagainstsurenderof

theCertificaterepresentingthexistingholding.

TransfersofinterestsintheBondsrepresentedbytheGlobalCertificatewilbefectedin

acordancewiththerulesandproceduresoftherelevantclearingsystems.

(b)DeliveryofNewCertificates

EachnewCertificatetobeisuedpursuantoCondition2(a)shalbeavailablefordelivery

withinfivebusinesdaysofreceiptbytheRegistrarortheTransferAgent,asthecasemay

be,ofadulycompletedformoftransferandsurenderofthexistingCertificate(s).Delivery

ofthenewCertificate(s)shalbemadeathespecifiedoficeoftheTransferAgentorofthe

Registrar(asthecasemaybe)towhomdeliveryorsurenderofsuchformoftransferand

Certificateshalhavebenmadeor,atheoptionoftheholdermakingsuchdeliveryor

surenderasaforesaidandaspecifiedintherelevantformoftransferorotherwisein

writing,bemailedbyuninsuredpostatheriskoftheholderentitledtothenewCertificate

tosuchadresasmaybesospecified,unlesucholderequestsotherwiseandpaysin

advancetotherelevantTransferAgentortheRegistrar(asthecasemaybe)thecostsofsuch

othermethodofdeliveryand/orsuchinsuranceasitmayspecify.IntheseConditions,

“businesday”meansaday,otherthanaSaturday,Sundayorpublicholiday,onwhich

comercialbanksareopenforbusinesintheplaceofthespecifiedoficeoftherelevant

TransferAgentortheRegistrar,asthecasemaybe.

(c)TransferorExerciseFreofCharge

TransferoftheBondsandCertificateshalbefectedwithoutchargetotherelevant

BondholderbyoronbehalfoftheIsuer,theRegistrarortheTransferAgent,butupon(i)

paymentbytherelevantBondholderofanytaxorothergovernmentalchargesthatmaybe

leviedorimposedinrelationtoit(orthegivingofsuchindemnityand/orsecurityand/or

pre-fundingastheRegistrarortherelevantTransferAgentmayrequire),(i)theRegistraror

therelevantTransferAgentbeingsatisfiedinitsabsolutediscretionwiththedocumentsof

titleoridentityofthepersonmakingtheaplicationand(i)theRegistrarortherelevant

AgentbeingsatisfiedthatheRegulationshavebencompliedwith.

(d)ClosedPeriods

NoBondholdermayrequirethetransferofaBondtoberegistered(i)duringtheperiodof15

daysendingon(andincluding)theduedateforedemptionofthatBond,(i)afteraChange

ofControlPutExerciseNoticehasbendepositedinrespectofsuchBondpursuanto

Condition6(c),or(i)duringtheperiodofsevendaysendingon(andincluding)anyRecord

Date(asdefinedinCondition7(a).

(e)Regulations

AltransfersofBondsandentriesontheRegisterwilbemadesubjectothedetailed

regulationsconcerningtransferandregistrationofBonds,theinitialformofwhichis

scheduledtotheAgencyAgrement(the“Regulations”).EachoftheIsuerandthe

RegistrarmaybyagrementchangetheRegulationsfromtimetotime,withthepriorwriten

aprovaloftheTrusteorbytheTrustewiththepriorwritenaprovaloftheRegistrar.A

copyofthecurentRegulationswilbemadeavailableforinspectionatalreasonabletimes

duringnormalbusineshours(betwen9:00amto3:00pm(HongKongtime)fromMonday

toFriday(otherthanpublicholidays)uponpriorwritenrequestandprofofholdingtothe

satisfactionoftheRegistrarathespecifiedoficeoftheRegistrar.

3.GUARANTEANDSTATUS

(a)Guarante:TheGuarantorhasintheTrustDedunconditionalyandirevocablyguaranted

(the“Guarante”)theduepaymentofalsumsexpresedtobepayablebytheIsuerunder

theTrustDedandtheBonds.ItsobligationsinthatrespectarecontainedintheTrustDed.

(b)StatusoftheBondsandtheGuarante:TheBondsconstitutedirect,unsubordinated,

unconditionaland(subjectoCondition4)unsecuredobligationsoftheIsuerandshalatal

timesrankparipasuandwithoutanypreferenceamongthemselves.Thepayment

obligationsoftheIsuerundertheBondsandtheobligationsoftheGuarantorunderthe

Guaranteshal,saveforsuchexceptionsasmaybeprovidedbyaplicablelawandsubject

toCondition4(a),ataltimesrankatleastequalywithalotherpresentandfuture

unsecuredandunsubordinatedobligationsoftheIsuerandtheGuarantor,respectively.

4.NEGATIVEPLEDGEANDOTHERCOVENANTS

(a)NegativePledge

SolongasanyBondremainsoutstanding,neithertheIsuernortheGuarantorwil,andeach

oftheIsuerandtheGuarantorwilensurethatnoneofthePrincipalSubsidiarieswil,create

orpermitosubsistanySecurityInterest(saveforanyPermitedSecurityInterest)uponany

ofitspresentorfutureundertakings,asetsorevenues(includinguncaledcapital)tosecure

therepaymentof,oranyguaranteorindemnityinrespectof,anyPublicExternal

Indebtednes,withoutathesametimeorpriortheretoacordingtotheBonds(i)thesame

securityasiscreatedorsubsistingtosecureanysuchPublicExternalIndebtednes,

guaranteorindemnityor(i)suchothersecurityashalbeaprovedbyanExtraordinary

Resolution(asdefinedintheTrustDed)oftheBondholders.

(b)Isuer’sActivities

TheIsuerundertakesthatitwilnot,andtheGuarantorshalprocurethatheIsuerwilnot,

solongasanyBondremainsoutstanding,caryonanybusinesactivitywhatsoeverother

thaninconectionwiththeisueofbondsand/ornotesandanyotheractivitiesinconection

withorincidentalthereto(suchactivitieshal,fortheavoidanceofdoubt,include(i)the

establishmentandmaintenanceofmediumtermnoteprograme,(i)theofering,saleor

isuanceofbondsand/ornotes,and(i)theon-lendingoftheprocedsoftheisueofbonds

and/ornotestotheGuarantororanyotherSubsidiariesoftheGuarantor).

(c)InformationRights

InthecaseoftheGuarantor,furnishtheTrustewith(i)copiesoftheGuarantorAudited

FinancialReportsinEnglishasonastheyareavailable,butinanyeventwithin120days

afterthendofeachRelevantPeriodand(i)copiesoftheGuarantorUnauditedFinancial

ReportsinEnglishasonastheyareavailable,butinanyeventwithin90daysafterthend

ofeachRelevantPeriod;providedthat,ifatanytimethecapitalstockoftheGuarantoris

listedfortradingonarecognisedstockexchange,theGuarantorshalfurnishtheTruste,as

sonastheyareavailablebutinanyeventnotmorethan14daysafteranyfinancialorother

reportsoftheGuarantoraremadepubliclyavailable,trueandcorectelectronicopiesof

anypublishedfinancialorothereportinEnglishfiledwithsuchstockexchangeinlieuof

thereportsidentifiedin(i)and(i)above.

TheTrusteshalnotberequiredtoreviewtheGuarantorAuditedFinancialReports,the

GuarantorUnauditedFinancialReportsoranyotherfinancialreportfurnishedordeliveredto

itascontemplatedinthisCondition4(c)and,ifthesameshalnotbeintheEnglish

language,shalnotberequiredtorequestorobtainorarangeforanEnglishlanguage

translationofthesame,andtheTrusteshalnotbeliabletoanyBondholderoranyother

personfornotdoingso.

UndertheTrustDed,solongasanyBondremainsoutstanding,theIsuerandGuarantorare

obligedtofurnishtheTrustewithaComplianceCertificate(onwhichtheTrustemayrely

astosuchcompliance)(A)within14daysaftertheGuarantorAuditedFinancialReportsor

theGuarantorUnauditedFinancialReports,asthecasemaybe,aremadepubliclyavailable;

and(B)within14daysofanywritenrequestbytheTruste.

(d)Definitions:

IntheseConditions:

“ComplianceCertificate”meansacertificateoftheIsuerortheGuarantor(asthecasemay

be)signedbyanyauthorisedsignatoryoftheIsuerortheGuarantor(asthecasemaybe)

confirmingthat,havingmadealreasonablenquiries,tothebestoftheknowledge,

informationandbeliefoftheIsuerortheGuarantor(asthecasemaybe),asatadate(the

“CertificationDate”)notmorethanfivedaysbeforethedateofthecertificate:

(i)noEventofDefault(asdefinedinCondition9)orPotentialEventofDefaulthas

ocuredsincetheCertificationDateofthelastsuchcertificateor(ifnone)thedateof

theTrustDedor,ifsuchaneventhasocured,givingdetailsofit;

(i)eachoftheIsuerandtheGuarantorhascompliedwithalitsobligationsunderthe

TrustDed,theAgencyAgrementandtheBondsor,ifnon-compliancehasocured,

givingdetailsofit;and

(i)noChangeofControl(asdefinedinCondition6)hasocuredsincetheCertification

Dateofthelastsuchcertificateor(ifnone)thedateoftheTrustDedor,ifsuchan

eventhasocured,givingdetailsofit;

“GuarantorAuditedFinancialReports”meansanualauditedfinancialstatements(ona

consolidatedbasis)oftheGuarantor,includingaconsolidatedbalanceshet,aconsolidated

statementofincome,aconsolidatedstatementofcomprehensiveincome,aconsolidated

statementofchangesinequityandaconsolidatedstatementofcashflows,togetherwithany

statements,reports(includinganyauditors’reports)andnotesatachedtorintendedtobe

readwithanyofthem;

“GuarantorUnauditedFinancialReports”meansemi-anual(oranyotherinterim

reportingperiodrequiredbyaplicablelaworegulations)unauditedfinancialstatements

(onaconsolidatedbasis)oftheGuarantor,includingaconsolidatedbalanceshet,a

consolidatedstatementofincome,aconsolidatedstatementofcomprehensiveincome,a

consolidatedstatementofchangesinequityandaconsolidatedstatementofcashflows,

togetherwithanystatements,reports(includinganydirectors’andauditors’reviewreports,

ifany)andnotesatachedtorintendedtobereadwithanyofthem,aspreparedonabasis

consistentwiththeGuarantorAuditedFinancialReports;

“Group”meanstheGuarantoranditsconsolidatedsubsidiariestakenasawhole;

“HongKong”meanstheHongKongSpecialAdministrativeRegionofthePeople’sRepublic

ofChina;

“NationalExportCreditAgencyGuarantedCapitalMarketsInstrument”meansany

PublicExternalIndebtednesisuedbyanentity(notbeingtheIsuer,theGuarantorora

PrincipalSubsidiary)thatisguarantedbyanyNationalExportCreditAgency;

“NationalExportCreditAgency”meansanyoftheExport-ImportBankoftheUnited

StatesortheExportCreditsGuaranteDepartmentoftheU.K.ortheExportCredit

GuaranteSchemeofGermanyorCOFACEofFranceoranyotheragencyofthegovernment

ofanycountrythatprovidesguarantestosuporthefinancingofaircraft(orpartsthereof)

exportedfromthatcountry;

“NetAsets”meanstotalasetslestotaliabilities;

“outstanding”hasthemeaningascribedtoitintheTrustDed;

“PermitedSecurityInterest”means:

(i)anySecurityInterestonanypropertyorasetexistingathetimeofacquisitionofsuch

propertyorasetortosecurethepaymentofaloranypartofthepurchasepriceor

constructioncosthereofortosecureanyindebtednesincuredpriorto,orathetime

of,suchacquisitionorthecompletionofconstructionofsuchpropertyorasetforthe

purposeofinancingaloranypartofthepurchasepriceorconstructioncosthereofor

anysubstitutesecuritycreatedonsuchpropertyorasetinconectionwiththe

refinancingoftheindebtednesecuredbytherelevantpropertyoraset(providedthat

theprincipalamountsecuredbyanysuchsecuritymaynotbeincreasedwithouthe

aprovalbyanExtraordinaryResolutionoftheBondholders);

(i)anylienarisingbyoperationoflaw;

(i)anySecurityInterestonanypropertyorasetsecuringanyPublicExternal

Indebtednesif(a)bythetermsofsuchindebtednesitisexpreslyprovidedthat

recoursebytheholdersofsuchindebtednesislimitedtothepropertiesorasetsofthe

isueror,asthecasemaybe,borowerofsuchPublicExternalIndebtednesandthe

revenuestobegeneratedbytheoperationof,orlosofordamageto,suchpropertiesor

asets,forepaymentofthemoneysadvancedandpaymentofinteresthereonand(b)

suchfinancingisnotguarantedbytheIsuer,theGuarantororanyPrincipal

Subsidiary;and

(iv)anySecurityInterestonanypropertyorasetoftheIsuer,theGuarantororany

PrincipalSubsidiarywhichiscreatedpursuantoanysecuritisation(including,forthe

avoidanceofdoubt,securitisationintheformofrentalrealisation),repackagingorlike

arangementinacordancewithnormalmarketpractice;

“PotentialEventofDefault”meansaneventorcircumstancewhichcouldwiththegivingof

notice,lapseoftime,isueofacertificateand/orfulfilmentofanyotherequirement

providedforinCondition9becomeanEventofDefault;

“PRC”meansthePeople’sRepublicofChina(forthepurposeshereofnotincludingHong

KongortheMacauSpecialAdministrativeRegionofthePeople’sRepublicofChinaor

Taiwan);

“PrincipalSubsidiary”meansanySubsidiaryoftheGuarantorwhoseNetAsets,ashown

bytheconsolidatedacountsofsuchSubsidiary,baseduponwhichthelatestGuarantor

AuditedFinancialReportshavebenprepared,areatleast10.0percent.oftheNetAsetsof

theGroupashownbysuchGuarantorAuditedFinancialReports,providedthatifanysuch

Subsidiary(the“Transferor”)shalatanytimetransferthewholeorasubstantialpartofits

busines,undertakingorasetstotheGuarantororanotherSubsidiaryoftheGuarantor(the

“Transfere”)then(a)ifthewholeofthebusines,undertakingandasetsoftheTransferor

shalbesotransfered,theTransferorshalthereuponceasetobeaPrincipalSubsidiaryand

theTransfere(unlesitistheGuarantor)shalthereuponbecomeaPrincipalSubsidiary;

and(b)ifonlyasubstantialpartofthebusines,undertakingandasetsoftheTransferor

shalbesotransfered,theTransferorshalremainaPrincipalSubsidiaryandtheTransfere

(unlesitistheGuarantor)shalthereuponbecomeaPrincipalSubsidiary.

AnySubsidiarywhichbecomesaPrincipalSubsidiarybyvirtueof(a)aboveorwhich

remainsorbecomesaPrincipalSubsidiarybyvirtueof(b)aboveshalcontinuetobea

PrincipalSubsidiaryuntilthearlierofthedateofisueof(i)thefirstGuarantorAudited

FinancialReportspreparedasatadatelaterthanthedateoftherelevantransferwhichshow

theNetAsetsashownbytheconsolidatedacountsofsuchSubsidiary,baseduponwhich

suchGuarantorAuditedFinancialReportshavebenprepared,tobelesthan10.0percent.

oftheNetAsetsoftheGroup,ashownbysuchGuarantorAuditedFinancialReportsor(i)

areportbytheGroup’sauditorsdatedonorafterthedateoftherelevantransferwhich

showstheNetAsetsofsuchSubsidiaryonaconsolidatedbasistobelesthan10.0percent.

oftheNetAsetsoftheGroup.Acertificate(onwhichtheTrustemayrelyconclusively

withoutfurtherenquiryandwithoutliabilitytoanyBondholdersoranyotherperson)bythe

GuarantorthataSubsidiaryisorisnotaPrincipalSubsidiaryshal,intheabsenceof

manifesteror,beconclusive;

“PublicExternalIndebtednes”meansanyindebtednesrepresentedbybonds,notes,

debentures,debenturestock,loanstock,certificatesorothersimilarinstrumentswhich(i)

hasanoriginalmaturityinexcesofoneyearand(i)is,oriscapableofbeing,quoted,listed

ortradedonanystockexchangeorover-the-counterorothersimilarsecuritiesmarket

outsidethePRC(withoutregard,however,towhetherornotsuchinstrumentsaresold

throughpublicoferingsorprivateplacements),providedthatanyamountsowedinrelation

toaNationalExportCreditAgencyGuarantedCapitalMarketsInstrumentwilnot

constitutePublicExternalIndebtednesnotwithstandingthatsuchamountsareguaranted

directlyorindirectlybytheIsuer,theGuarantororanyPrincipalSubsidiary;

“RelevantPeriod”means(i)inrelationtotheGuarantorAuditedFinancialReports,each

periodof12monthsendingonthelastdayoftheGuarantor’sfinancialyear(beingasathe

IsueDate,31Decemberofthatfinancialyear;(i)inrelationtotheGuarantorUnaudited

FinancialReports,eachperiodofsixmonthsendingonthelastdayoftheGuarantor’sfirst

halfinancialyear(beingasatheIsueDate,30Juneofthatfinancialyear);

“SecurityInterest”meansanymortgage,charge,lien,pledge,encumbranceorother

securityinterestofanykind(including,withoutlimitation,anythinganalogoustoanyofthe

foregoingunderthelawsofanyjurisdictionandanyconditionalsaleorothertitleretention

agrementorleaseinthenaturethereoforanyagrementocreateanymortgage,charge,

lien,pledge,encumbranceorothersecurityinterestofanykind);and

a“Subsidiary”ofanypersonmeans(a)anycompanyorotherbusinesentityofwhichthat

personownsorcontrols(eitherdirectlyorthroughoneormoreotherSubsidiaries)morethan

50percent.oftheisuedsharecapitalorotherownershipinteresthavingordinaryvoting

powertoelectdirectors,managersortrustesofsuchcompanyorotherbusinesentity,or

(b)anycompanyorotherbusinesentitywhichatanytimehasitsacountsconsolidated

withthoseofthatpersonorwhich,underthelaw,regulationsorgeneralyacepted

acountingprinciplesofthejurisdictionofincorporationofsuchpersonfromtimetotime,

shouldhaveitsacountsconsolidatedwiththoseofthatperson.

5.INTEREST

TheBondsbearinterestontheiroutstandingprincipalamountfromandincluding14August2025

(the“IsueDate”)atherateof6.0percent.peranum(the“RateofInterest”),payable

semi-anualyinarearinequalinstalmentsofU.S.$30.0perCalculationAmount(asdefined

below)on14Februaryand14Augustineachyear(eachan“InterestPaymentDate”)

comencingon14February2026.

EachBondwilceasetobearinterestfromtheduedateforedemptionunles,uponsurenderof

theCertificaterepresentingsuchBond,paymentofprincipalisimproperlywitheldorefused.In

suchevent,itshalcontinuetobearinterestatsuchrate(bothbeforeandafterjudgment)until

whicheveristhearlierof(a)thedayonwhichalsumsdueinrespectofsuchBonduptothatday

arereceivedbyoronbehalfoftherelevantBondholder,and(b)thedayfalingsevendaysafterthe

TrusteorthePrincipalPayingAgenthasnotifiedBondholdersofreceiptofalsumsduein

respectofaltheBondsuptothatseventhday(exceptothextenthathereisfailureinthe

subsequentpaymentotherelevantBondholderundertheseConditions).

IfinterestisrequiredtobecalculatedforaperiodoflesthanacompleteInterestPeriod,the

relevantday-countfractionwilbedeterminedonthebasisofa360-dayearconsistingof12

monthsof30dayseachand,inthecaseofanincompletemonth,thenumberofdayselapsed.

IntheseConditions,theperiodbeginingonandincludingtheIsueDateandendingonbut

excludingthefirstInterestPaymentDate,andeachsucesiveperiodbeginingonandincluding

anInterestPaymentDateandendingonbutexcludingthenextsucedingInterestPaymentDate

iscaledan“InterestPeriod”.

InterestinrespectofanyBondshalbecalculatedperU.S.$1,000inprincipalamountofthe

Bonds(the“CalculationAmount”).TheamountofinterestpayableperCalculationAmountfor

anyperiodshal,saveasprovidedaboveinrelationtoequalinstalments,bequaltotheproductof

theRateofInterest,theCalculationAmountandtheday-countfractionfortherelevantperiod,

roundingtheresultingfiguretothenearestcent(halfacentbeingroundedupwards).

6.REDEMPTIONANDPURCHASE

(a)FinalRedemption

Unlespreviouslyredemed,orpurchasedandcanceled,theBondswilberedemedatheir

principalamounton14August2028.TheBondsmaynotberedemedatheoptionofthe

IsuerotherthaninacordancewiththisCondition6.

(b)RedemptionforTaxationReasons

TheBondsmayberedemedatheoptionoftheIsuerinwhole,butnotinpart,atanytime,

ongivingnotlesthan30normorethan60days’noticetotheBondholdersinacordance

withCondition16(whichnoticeshalbeirevocable),andinwritingtotheTrusteandthe

PrincipalPayingAgent,atheirprincipalamountogetherwithinterestacruedtothedate

fixedforedemption,if(i)theIsuer(or,iftheGuarantewascaled,theGuarantor)hasor

wilbecomeobligedtopayAditionalTaxAmounts(asdefinedinCondition8)asprovided

oreferedtoinCondition8asaresultofanychangein,oramendmento,thelawsor

regulationsoftheBritishVirginIslands,theCaymanIslands,HongKongorthePRC,or,in

eachcase,anypoliticalsubdivisionoranyauthoritythereoforthereinhavingpowertotax,

oranychangeintheaplicationoroficialinterpretationofsuchlawsoregulations

(includingbutnotlimitedtoanydecisionbyacourtofcompetentjurisdiction),which

changeoramendmentbecomesefectiveonorafter11August2025,and(i)suchobligation

canotbeavoidedbytheIsuer(ortheGuarantor,asthecasemaybe)takingreasonable

measuresavailabletoit,providedthatnosuchnoticeofredemptionshalbegivenearlier

than90dayspriortothearliestdateonwhichtheIsuer(ortheGuarantor,asthecasemay

be)wouldbeobligedtopaysuchAditionalTaxAmountswereapaymentinrespectofthe

Bonds(ortheGuarante,asthecasemaybe)thendue.Priortothegivingofanynoticeof

redemptionpursuantothisCondition6(b),theIsuer(or,iftheGuarantewerecaled,the

Guarantor)shaldelivertotheTruste(A)acertificatesignedbyanydirectoroftheIsuer

or,asthecasemaybe,theGuarantor,statingthatheobligationreferedtoin(i)aboveof

thisCondition6(b)canotbeavoidedbytheIsueror,asthecasemaybe,theGuarantor

takingreasonablemeasuresavailabletoitand(B)anopinioninformandsubstance

satisfactorytotheTrusteofindependentlegalortaxadvisersofrecognisedstandingtothe

efecthatheIsuerortheGuarantor,asthecasemaybe,hasorwilbecomeobligedtopay

suchaditionalamountsasaresultofsuchchangeoramendment.TheTrusteshalbe

entitled(butshalnotbeobliged)toaceptandrelyconclusivelyuponsuchcertificateand

opinion(withoutfurtherinvestigationorenquiryandwithoutliabilitytotheIsuer,the

Guarantor,theBondholdersoranyotherperson)asuficientevidenceofthesatisfactionof

theconditionsprecedentsetoutin(i)and(i)aboveofthisCondition6(b),inwhichevent

theyshalbeconclusiveandbindingontheBondholders.AlBondsinrespectofwhichany

noticeofredemptionisgivenunderthisCondition6(b)shalberedemedonthedateandin

suchmaneraspecifiedinsuchnoticeinacordancewiththisCondition6(b).

(c)RedemptionforChangeofControl

AtanytimefolowingtheocurenceofaChangeofControl,theholderofanyBondwil

havetheright,atsucholder’soption,torequiretheIsuertoredemal,butnotsomeonly,

ofthatholder’sBondsontheChangeofControlPutSetlementDateataredemptionprice

equalto101percent.oftheirprincipalamount,togetherwithacruedinterestobut

excludingtheChangeofControlPutSetlementDate.Inordertoexercisesuchright,the

holderoftherelevantBondmustdepositathespecifiedoficeofanyPayingAgentaduly

completedandsignednoticeofredemption,intheformforthetimebeingcurent,

obtainablefromthespecifiedoficeofanyPayingAgent(a“ChangeofControlPut

ExerciseNotice”),togetherwiththeCertificaterepresentingtheBondstoberedemed,by

notlaterthan30daysfolowingaChangeofControl,or,iflaterandprovidedthatheIsuer

shalhavegivenoticeofaChangeofControltoBondholdersinacordancewithCondition

16within14daysofsuchChangeofControl,30daysfolowingthedateuponwhichsuch

noticeisgiventoBondholders.The“ChangeofControlPutSetlementDate”inrespectof

anyBondshalbethefourtenthdayafterthexpiryofsuchperiodof30daysasreferedto

aboveinthisCondition6(c).

AChangeofControlPutExerciseNotice,oncedelivered,shalbeirevocableandtheIsuer

shalredemtheBondsubjectotheChangeofControlPutExerciseNoticesdeliveredas

aforesaidontheChangeofControlPutSetlementDate.

TheIsuershalgivenoticetoBondholders(inacordancewithCondition16)andtothe

TrusteandthePrincipalPayingAgentinwritingbynotlaterthan14daysfolowingthefirst

dayonwhichitbecomesawareoftheocurenceofaChangeofControl,whichnoticeshal

specifytheprocedureforexercisebyholdersoftheirightstorequireredemptionofthe

BondspursuantothisCondition6(c).

NoneoftheTrusteoranyoftheAgentshalberequiredtotakeanystepstoascertain

whetheraChangeofControlhasocuredandshalnotberesponsiblefororliabletothe

Bondholders,theIsuerortheGuarantorforanylosarisingfromanyfailuretodoso.

ForthepurposesofthisCondition6:

“Afiliate”means,withrespectoanyperson,anyotherperson(i)directlyorindirectly

Controling,Controledby,orunderdirectorindirectcomonControlwith,suchpersonor

(i)whoisaspouseorchildofanypersondescribedin(i)above;or(i)anytrustestablished

forthebenefitofanypersondescribedin(i)and(i)above;

a“ChangeofControl”ocurswhen:

(i)ChinaEverbrightLimitedandanyofitsAfiliatescolectivelyceasetobethesingle

largestshareholderoftheGuarantor;

(i)theGuarantorceasestodirectlyorindirectlyholdorown100percent.oftheisued

sharecapitaloftheIsuer;

“Control”means(whereaplicable):(i)theownership,acquisitionorcontrolofmorethan

50percent.ofthevotingrightsoftheisuedsharecapitalofapersonor(i)therighto

apointand/oremovealorthemajorityofthemembersofaperson’sboardofdirectorsor

othergoverningbody,whetherobtainedirectlyorindirectly,andwhetherobtainedby

ownershipofsharecapital,theposesionofvotingrights,contractorotherwise,andthe

terms“Controling”and“Controled”havemeaningscorelativetotheforegoing;and

a“person”meansanyindividual,company,corporation,firm,partnership,jointventure,

undertaking,asociation,organisation,trust,state,agencyofastate(ineachcasewhetheror

notbeingaseparatelegalentity).

(d)NoticesofRedemption

AlBondsinrespectofwhichanynoticeofredemptionisgivenunderthisCondition6shal

beredemedonthedatespecifiedinsuchnoticeinacordancewiththisCondition6.Ifthere

ismorethanonenoticeofredemptiongiveninrespectofanyBond(whichshalincludeany

noticegivenbytheIsuerpursuantoCondition6(b)andanyChangeofControlPut

ExerciseNoticegivenbyaBondholderpursuantoCondition6(c),thenoticegivenfirstin

timeshalprevailandintheventoftwonoticesbeingivenonthesamedate,thefirstobe

givenshalprevail.NeithertheTrustenoranyoftheAgentshalberesponsiblefor

monitoringortakinganystepstoascertainwhetheranyofthecircumstancesmentionedin

thisCondition6hasocuredorforcalculatingorverifyinganycalculationsofanyamounts

payableunderanynoticeofredemptionorChangeofControlPutExerciseNoticeandnone

ofthemshalbeliabletotheBondholders,theIsuer,theGuarantororanyotherpersonfor

notdoingso.

(e)Purchase

TheIsuer,theGuarantorandtheirespectiveSubsidiariesmayatanytimepurchaseBonds

intheopenmarketorotherwiseatanyprice.TheBondsopurchased,whileheldbyoron

behalfoftheIsuer,theGuarantororanysuchSubsidiary,shalnotentitletheholdertovote

atanymetingsoftheBondholdersandshalnotbedemedtobeoutstandingforthe

purposesof,amongotherthings,calculatingquorumsatmetingsoftheBondholdersorfor

thepurposesofCondition9,Condition12(a)orCondition13orwhentheTrusteis

determiningprejudiceormaterialprejudicetoBondholders.AnyBondspurchasedbythe

Isuer,theGuarantororanyoftheirespectiveSubsidiariesmay,atheIsuer’sorthe

Guarantor’sdiscretion,beheld,resoldorsurenderedtotheRegistrarforcancelation.

(f)Cancelation

AlBondsredemedbytheIsuerorsurenderedbytheIsuer,theGuarantororanyoftheir

respectiveSubsidiarieshalbecanceledandmaynotbereisuedoresold.

7.PAYMENTS

(a)MethodofPayment

(i)Paymentsofprincipalandpremium(ifany)shalbemade(subjectosurenderofthe

relevantCertificatesathespecifiedoficeofanyPayingAgentoroftheRegistrarifno

furtherpaymentfalstobemadeinrespectoftheBondsrepresentedbysuch

Certificates)inthemanerprovidedinCondition7(a)(i).

(i)InterestoneachBondshalbepaidontheduedateforsuchpaymentotheperson

shownontheRegisterathecloseofbusinesonthePaymentBusinesDaybeforethe

relevantduedateforpaymenthereof(the“RecordDate”).Paymentsofintereston

eachBondshalbemadebytransfertoaU.S.dolaracountoftheBondholder

maintainedbyoronbehalfofitwithabankinNewYorkCity,detailsofwhichapear

ontheRegisterathecloseofbusinesontherelevantRecordDate.

(i)IftheamountofprincipalbeingpaiduponsurenderoftherelevantCertificateisles

thantheoutstandingprincipalamountofsuchCertificate,theRegistrarwilanotate

theRegisterwiththeamountofprincipalsopaidandwil(ifsorequestedbytheIsuer

oraBondholder)isueanewCertificatewithaprincipalamountequaltotheremaining

unpaidoutstandingprincipalamount.Iftheamountofinterestbeingpaidislesthan

theamounthendue,theRegistrarwilanotatetheRegisterwiththeamountof

interestsopaid.

Notwithstandingtheforegoing,solongastheGlobalCertificateisheldonbehalfof

EuroclearBankSA/NV,ClearstreamBankingS.A.oranyotherclearingsystem,each

paymentinrespectoftheGlobalCertificatewilbemadetothepersonshownastheholder

intheRegisterathecloseofbusinesoftherelevantclearingsystemontheClearingSystem

BusinesDaybeforetheduedateforsuchpayments,where“ClearingSystemBusinesDay”

meansawekday(MondaytoFriday,inclusive)except25Decemberand1January.

(b)PaymentsSubjectoFiscalLaws

Alpaymentswilbesubjectinalcasesto(i)anyaplicablefiscalorotherlaws,regulations

andirectivesaplicabletheretointheplaceofpayment,butwithoutprejudicetothe

provisionsofCondition8and(i)anywitholdingordeductionrequiredpursuantoan

agrementdescribedinSection1471(b)oftheU.S.InternalRevenueCodeof1986,as

amended(the“Code”)orotherwiseimposedpursuantoSections1471through1474ofthe

Code,anyregulationsoragrementsthereunder,anyoficialinterpretationsthereofor

(withoutprejudicetotheprovisionsofCondition8)anylawimplementingan

intergovernmentalaproachtheretobutnocomisionorexpenseshalbechargedtothe

Bondholdersinrespectofsuchpayments.

(c)PaymentInitiation

WherepaymentistobemadebytransfertoaU.S.dolaracount,paymentinstructions(for

valuetheduedateor,ifthatisnotaPaymentBusinesDay,forvaluethefirstfolowingday

whichisaPaymentBusinesDay)wilbeinitiatedontheduedateforpayment(or,ifthat

dateisnotaPaymentBusinesDay,onthefirstfolowingdaywhichisaPaymentBusines

Day)or,inthecaseofpaymentsofprincipalwheretherelevantCertificatehasnotben

surenderedathespecifiedoficeofanyPayingAgent,onaPaymentBusinesDayon

whichthePrincipalPayingAgentisopenforbusinesandonwhichtherelevantCertificate

isurendered.

(d)ApointmentofAgents

ThePrincipalPayingAgent,theRegistrarandtheTransferAgentinitialyapointedbythe

IsuerandtheGuarantorandtheirespectivespecifiedoficesarelistedbelow.ThePrincipal

PayingAgent,theRegistrar,theTransferAgentandanyotherAgentsapointedfromtimeto

timeactsolelyasagentsoftheIsuerandtheGuarantorandonotasumeanyobligationor

relationshipofagencyortrustfororwithanyBondholder.TheIsuerandtheGuarantor

reservetherightatanytimewiththeaprovaloftheTrustetovaryorterminatethe

apointmentofthePrincipalPayingAgent,theRegistrar,theTransferAgentoranyofthe

otherAgentsandtoapointaditionalorotherAgents,providedthatheIsuerandthe

Guarantorshalataltimesmaintain(i)aPrincipalPayingAgent,(i)aRegistrar,(i)a

TransferAgent,and(iv)suchotheragentsasmayberequiredbyanystockexchangeon

whichtheBondsmaybelisted,ineachcase,asaprovedbytheTruste.

Noticeofanysuchterminationorapointmentoranychangeofanyspecifiedoficeofan

AgentshalpromptlybegivenbytheIsuerortheGuarantortotheBondholdersin

acordancewithCondition16.

(e)DelayinPayment

Bondholderswilnotbentitledtoanyinterestorotherpaymentforanydelayafterthedue

dateinreceivingtheamountdueonaBondiftheduedateforapaymentisnotaPayment

BusinesDay,oriftheBondholderislateinsurenderingorcanotsurenderitsCertificate

(ifrequiredtodoso),orifawiretransfermadeinacordancewithCondition7(a)arivesin

theregisteredacountoftheBondholderaftertheduedateforpayment.

(f)PaymentBusinesDays

IfanydateforpaymentinrespectofanyBondisnotaPaymentBusinesDay,theholder

shalnotbentitledtopaymentuntilthenextfolowingPaymentBusinesDaynortoany

interestorothersuminrespectofsuchpostponedpayment.InthisCondition7,“Payment

BusinesDay”meansaday(otherthanaSaturday,Sundayorapublicholiday)onwhich

banksandforeignexchangemarketsaregeneralyopenforbusinesinNewYork,Hong

KongandtheplaceinwhichthespecifiedoficeofthePrincipalPayingAgentislocatedand,

ifsurenderoftherelevantCertificateisrequired,therelevantplaceofpresentation.

8.TAXATION

Alpaymentsofprincipal,premium(ifany)andinterestbyoronbehalfoftheIsuerorthe

GuarantorinrespectoftheBondsorundertheGuarante(asthecasemaybe)shalbemadefre

andclearof,andwithoutset-oforcounterclaimandwithoutwitholdingordeductionfororon

acountof,anypresentorfuturetaxes,duties,asesmentsorgovernmentalchargesofwhatever

natureimposed,levied,colected,witheldorasesedbyorwithintheBritishVirginIslands,the

CaymanIslands,HongKongorthePRCoranyauthoritythereinorthereofhavingpowertotax,

unlesuchwitholdingordeductionisrequiredbylaw.

WheresuchwitholdingordeductionismadebytheIsueror,asthecasemaybe,theGuarantor

byorwithinthePRCatarateuptoandincludingtheagregaterateaplicableon11August2025

(the“AplicableRate”),theIsuerortheGuarantor(asthecasemaybe)wilincreasethe

amountspaidbyitothextentrequired,sothathenetamountreceivedbytheBondholders

equalstheamountswhichwouldotherwisehavebenreceivablebythemhadnosuchwitholding

ordeductionbenrequired.

IftheIsuerortheGuarantor,asthecasemaybe,isrequiredtomakeadeductionorwitholding

(i)byorwithinthePRCinexcesoftheAplicableRate,or(i)bytheBritishVirginIslands,the

CaymanIslandsorHongKong,theIsuerortheGuarantor,asthecasemaybe,shalpaysuch

aditionalamounts(“AditionalTaxAmounts”)aswilresultinreceiptbytheBondholdersof

suchamountsaswouldhavebenreceivedbythemhadnosuchwitholdingordeductionben

required,excepthatnoAditionalTaxAmountshalbepayableinrespectofanyBond(orunder

theGuarante,asthecasemaybe):

(a)to,ortoathirdpartyonbehalfof,aBondholderwhoisliabletosuchtaxes,duties,

asesmentsorgovernmentalchargesinrespectofsuchBondbyreasonofitshavingsome

conectionwiththeBritishVirginIslands,theCaymanIslands,HongKongorthePRCother

thanthemereholdingoftheBond;or

(b)presented(orinrespectofwhichtheCertificaterepresentingitispresented)forpayment

morethan30daysaftertheRelevantDatexceptothextenthatherelevantBondholder

wouldhavebenentitledtosuchAditionalTaxAmountsonpresentingitforpaymentonthe

30thday.

ReferencesintheseConditionstoprincipal,premiumandinterestshalbedemedalsotoreferto

anyAditionalTaxAmountswhichmaybepayableunderthisCondition8oranyundertakingor

covenantgiveninaditiontheretorinsubstitutionthereforpursuantotheTrustDed.

NoAditionalTaxAmountshalbepaidtoaholderthatisafiduciary,partnershiporpersonother

thanthesolebeneficialownerofanypaymentothextenthatsuchpaymentwouldberequiredto

beincludedintheincomedeclarableunderthelawsoftheBritishVirginIslands,theCayman

Islands,HongKongorthePRC,fortaxpurposes,ofabeneficiaryorsetlorwithrespectothe

fiduciary,oramemberofthatpartnershiporabeneficialownerwhowouldnothavebenentitled

tosuchAditionalTaxAmountshadthatbeneficiary,setlor,memberorbeneficialownerbenthe

holderthereof.

“RelevantDate”inrespectofanyBondmeansthedateonwhichpaymentinrespectofitfirst

becomesdueor(ifanyamountofthemoneypayableisimproperlywitheldorefused)thedate

onwhichpaymentinfuloftheamountoutstandingismadeor(ifearlier)thedatefalingseven

daysafterthatonwhichnoticeisdulygiventotheBondholdersthat,uponfurthersurenderofthe

CertificaterepresentingsuchBondbeingmadeinacordancewiththeseConditions,suchpayment

wilbemade,providedthatpaymentisinfactmadeuponsuchsurender.

IftheIsuerand/ortheGuarantorbecomesubjectatanytimetoanytaxingjurisdictionotherthan

theBritishVirginIslands,theCaymanIslands,HongKongandthePRC,referencesinthese

ConditionstotheBritishVirginIslands,theCaymanIslands,HongKongand/orthePRCshalbe

construedasreferencestotheBritishVirginIslands,theCaymanIslands,HongKong,thePRC

and/orsuchotherjurisdiction(asthecasemaybe).

NeithertheTrustenoranyAgentshalberesponsibleforpayinganytax,duty,asesments,

charges,witholdingorotherpaymentreferedtointhisCondition8orotherwiseinconection

withtheBondsorfordeterminingwhethersuchamountsarepayableortheamounthereof,and

shalnotberesponsibleorliableforanyfailurebytheIsuer,theGuarantorortheBondholdersor

anyotherpersontopaysuchtax,duty,asesments,charges,witholdingorotherpaymentand

shalnotberesponsibletoprovideanynoticeorinformationinrelationtotheBondsinconection

withpaymentofsuchtaxes,duties,charges,asesments,governmentalcharges,witholdingor

otherpaymentimposedbyorinanyjurisdiction,includingwithoutlimitationanynoticeor

informationtotheTrusteoranyAgentoranypersonthatwouldpermit,enableorfacilitatethe

paymentofanyprincipal,premium(ifany),interestorotheramountunderorinrespectofthe

Bondswithoutdeductionorwitholdingfororonacountofanytax,duty,charge,asesment,

governmentalcharge,witholdingorotherpaymentimposedbyorinanyjurisdiction.

9.EVENTSOFDEFAULT

Ifanyofthefolowingevents(eachan“EventofDefault”)ocurstheTrusteatitsabsolute

discretionmay,andifsorequestedbyholdersofatleast25percent.oftheagregateprincipal

amountoftheBondsthenoutstandingorifsodirectedbyanExtraordinaryResolutionshal

(providedthatinanysuchcasetheTrusteshalhavebenindemnifiedand/orsecuredand/or

pre-fundedtoitsatisfaction),givenoticetotheIsuerandtheGuarantorthatheBondsare,and

theyshalimediatelybecome,dueandpayableatheirprincipalamountogether(ifaplicable)

withanyacruedandunpaidinterest:

(a)Non-Payment:thereisafailuretopaytheprincipaloforanypremium(ifany)orintereston

anyoftheBondswhendueandsuchfailurecontinuesforaperiodof7days;or

(b)BreachofOtherObligations:theIsuerortheGuarantordoesnotperformorcomplywith

anyoneormoreofitsotherobligationsundertheBondsortheTrustDed,whichdefaultis

intheopinionoftheTrusteincapableofremedyor,ifsuchdefaultisintheopinionofthe

Trustecapableofremedy,suchdefaultisnotremediedwithin45daysafternoticeofsuch

defaultshalhavebengiventotheIsuerortheGuarantor(asthecasemaybe)bythe

Truste;or

(c)Cros-Aceleration:(i)anyotherpresentorfutureindebtednesoftheIsuer,theGuarantor

oranyofthePrincipalSubsidiariesfororinrespectofmoneysborowedoraisedbecomes

dueandpayablepriortoitstatedmaturitybyreasonofanyactualorpotentialdefault,event

ofdefaultorthelike(howsoeverdescribed),or(i)anysuchindebtednesisnotpaidwhen

dueor,asthecasemaybe,withinanyoriginalyaplicablegraceperiod,or(i)theIsuer,

theGuarantororanyofthePrincipalSubsidiariesfailstopaywhendueanyamountpayable

byitunderanypresentorfutureguarantefor,orindemnityinrespectof,anymoneys

borowedoraised,providedthatheagregateamountoftherelevantindebtednes,

guarantesandindemnitiesinrespectofwhichoneormoreoftheventsmentionedabovein

thisCondition9(c)haveocuredequalsorexcedsU.S.$50,000,000oritsequivalentinany

othercurency(onthebasisofthemidlespotratefortherelevantcurencyagainstheU.S.

dolarasquotedbyanyleadingbankonthedayonwhichthisCondition9(c)operates);or

(d)UnsatisfiedJudgment:oneormorejudgment(s)ororder(s)forthepaymentofanyamount

excedingU.S.$60,000,000oritsequivalentinanyothercurency(onthebasisofthemidle

spotratefortherelevantcurencyagainstheU.S.dolarasquotedbyanyleadingbankon

thedayonwhichthisCondition9(d)operates)isrenderedagainstheIsuer,theGuarantor

oranyofthePrincipalSubsidiaries,suchjudgmentcontinue(s)unsatisfiedandunstayedfor

aperiodof30daysafterthedate(s)thereofor,iflater,thedatethereinspecifiedforpayment

andnofurtherapealorjudicialreviewfromsuchjudgmentispermisibleunderaplicable

law;or

(e)EnforcementProcedings:adistres,atachment,executionorotherlegalprocesislevied,

enforcedorsuedoutonoragainsthewholeorasubstantialpartoftheproperty,asetsor

revenuesoftheIsuer,theGuarantororanyofthePrincipalSubsidiariesandisnot

dischargedorstayedwithin45days;or

(f)SecurityEnforced:anymortgage,charge,pledge,lienorotherencumbrance,presentor

future,createdorasumedbytheIsuer,theGuarantororanyofthePrincipalSubsidiaries

overthewholeorasubstantialpartoftheasetsoftheIsuer,theGuarantororthePrincipal

Subsidiaries,becomesenforceableandanystepistakentoenforceit(includingthetakingof

posesionortheapointmentofareceiver,managerorothersimilarperson)andisnot

dischargedorstayedwithin30days;or

(g)Insolvency:theIsuer,theGuarantororanyofthePrincipalSubsidiariesis(oris,orcould

be,demedbylaworacourtobe)insolventorbankruptorunabletopayitsdebts,stops,

suspendsorthreatenstostoporsuspendpaymentofalorasubstantialpartofitsdebts,

proposesormakesanyagrementforthedeferal,reschedulingorothereadjustmentofal

orasubstantialpartofitsdebts,proposesormakesageneralasignmentoranarangement

orcompositionwithorforthebenefitoftherelevantcreditorsinrespectofanyofsuchdebts

orcomencesavoluntarycaseorprocedingunderanyaplicablebankruptcylaw,consents

tothentryofjudgment,decreororderforeliefagainstitinaninvoluntarycaseor

procedingunderanyaplicablebankruptcylaw,consentstotheapointmentofareceiverof

itorforasubstantialpartofitspropertyandasets,consentstoracquiescesinthe

institutionofabankruptcyoraninsolvencyprocedingagainstit,ortakesanycorporate

actiontoauthoriseorefectanyoftheforegoing,oramoratoriumisagredordeclaredin

respectoforafectingalorasubstantialpartofthedebtsoftheIsuer,theGuarantororany

ofthePrincipalSubsidiaries,except,inthecaseofabankruptcyoraninsolvencyproceding

only,forthepurposeofandfolowedbyareconstruction,amalgamation,reorganisation,

mergerorconsolidation(i)ontermsaprovedbyanExtraordinaryResolutionofthe

Bondholders,or(i)inthecaseofaPrincipalSubsidiary,wherebytheundertakingandasets

ofsuchPrincipalSubsidiaryaretransferedtorotherwisevestedin(A)theIsuerorthe

Guarantor,asthecasemaybe,oranotherSubsidiaryoftheGuarantor,or(B)anyother

persononanarms’lengthbasis,wheretheprocedsresultingfromsuchtransferare

transferedtorotherwisevestedintheIsuerortheGuarantor,asthecasemaybe,or

anotherSubsidiaryoftheGuarantor;or

(h)Winding-up:anadministratorisapointed,anorderismadeoranefectiveresolution

pasedforthewinding-upordisolutionoftheIsuer,theGuarantororanyofthePrincipal

Subsidiaries,ortheIsuer,theGuarantororanyofthePrincipalSubsidiariesceasesor

threatenstoceasetocaryonalorasubstantialpartofitsbusinesoroperations,except(i)

forthepurposeofandfolowedbyareconstruction,amalgamation,reorganisation,merger,

consolidationordisposal(A)ontermsaprovedbyanExtraordinaryResolution(asdefined

intheTrustDed)oftheBondholdersor(B)inthecaseofaPrincipalSubsidiary,(x)

wherebytheundertakingandasetsofsuchPrincipalSubsidiaryaretransferedtor

otherwisevestedintheIsuerortheGuarantor,asthecasemaybe,oranotherSubsidiaryof

theGuarantoror(y)anydisposalorsaleofaPrincipalSubsidiarytoanyotherpersonon

arms’lengthtermsformarketconsideration,wheretheprocedsresultingfromsuchdisposal

orsalearetransferedtorotherwisevestedintheIsuerortheGuarantor,asthecasemay

be,oranotherSubsidiaryoftheGuarantor;or(i)amembers’voluntarysolventwinding-up

ofanyPrincipalSubsidiary;or

(i)AuthorisationandConsents:anyaction,conditionorthing(includingtheobtainingor

efectingofanynecesaryconsent,aproval,authorisation,exemption,filing,licence,order,

recordingoregistration)atanytimerequiredtobetaken,fulfiledordoneinorder(i)to

enabletheIsuerandtheGuarantorlawfulytoenterinto,exercisetheirespectiverightsand

performandcomplywiththeirespectiveobligationsundertheBondsandtheTrustDed;

(i)toensurethathoseobligationsreferedtoin(i)arelegalybindingandenforceableand

(i)tomaketheBonds,theCertificates,theRegisterandtheTrustDedadmisiblein

evidenceinthecourtsofHongKong,isnotaken,fulfiledordone;or

(j)Ilegality:itisorwilbecomeunlawfulforanyoftheIsuerandtheGuarantortoperformor

complywithanyoneormoreoftheirespectiveobligationsunderanyoftheBonds,the

TrustDed,theGuaranteand/ortheAgencyAgrement;or

(k)UnenforceabilityofGuarante:theGuarantebecomesunenforceableorinvalidorshal

foranyreasonceasetobeinfulforceandefectorisclaimedtobeunenforceable,invalid

ornotinfulforceorefectbytheGuarantor;or

(l)AnalogousEvents:anyeventocurswhichunderthelawsofanyrelevantjurisdictionhasan

analogousefectoanyoftheventsreferedtoinanyofConditions9(a)to9(k)(both

inclusive).

AcertificateinEnglish(substantialyintheformscheduledtotheTrustDed)signedbyany

AuthorisedSignatoryoftheIsuerortheGuarantor(asthecasemaybe)adresedtotheTruste,

thatinitsopinion(makingsuchadjustments(ifany)asitshaldemapropriate)aSubsidiaryis

orisnotorwasorwasnotatanyparticulartimeorduringanyparticularperiodaPrincipal

SubsidiaryshalbeconclusiveandbindingontheIsuer,theGuarantorandtheBondholders,and

theTrusteshalbentitledtorelyconclusivelyuponsuchcertificatewithoutfurtherinvestigation

orenquiryandwithoutliabilitytotheIsuer,theGuarantor,theBondholdersoranyotherperson.

10.PRESCRIPTION

ClaimsagainstheIsuerortheGuarantorforpaymentinrespectoftheBondshalbeprescribed

andbecomevoidunlesmadewithin10years(inthecaseofprincipalorpremium)orfiveyears

(inthecaseofinterest)fromtheapropriateRelevantDateinrespectofthem.

11.REPLACEMENTOFCERTIFICATES

IfanyCertificateislost,stolen,mutilated,destroyedordefacedoralegedtobelost,stolenor

destroyed,itmaybereplaced,subjectoaplicablelaws,regulationsorotherelevantregulatory

authorityregulations,athespecifiedoficeoftheRegistrarorsuchotherTransferAgentasmay

fromtimetotimebedesignatedbytheIsuerforthatpurposeandnoticeofwhosedesignationis

giventoBondholdersinacordancewithCondition16,ineachcaseonpaymentbytheclaimantof

thefesandcostsincuredinconectiontherewithandonsuchtermsastoevidence,security,

indemnity,pre-fundingandotherwiseastheIsuer,theRegistrarortherelevantTransferAgent

mayrequire.MutilatedordefacedCertificatesmustbesurenderedbeforereplacementswilbe

isued.

12.METINGSOFBONDHOLDERS,MODIFICATIONANDWAIVER

(a)MetingsofBondholders

TheTrustDedcontainsprovisionsforconveningmetingsofBondholderstoconsider

matersafectingtheirinterests,includingthesanctioningbyExtraordinaryResolutionofa

modificationofanyoftheseConditionsoranyprovisionsoftheTrustDedortheAgency

Agrement.SuchametingmaybeconvenedbytheIsuer,theGuarantorortheTrusteand

shalbeconvenedbytheTruste,ifrequestedtodosobyBondholdersholdingnotlesthan

10percent.inagregateprincipalamountoftheBondsforthetimebeingoutstandingandif

itisindemnifiedand/orsecuredand/orpre-fundedtoitsatisfactionagainstalcostsand

expenses.ThequorumforanymetingconvenedtoconsideranExtraordinaryResolution

wilbetwormorepersonsholdingorepresentingholdersofmorethanfiftypercent.in

agregateprincipalamountoftheBondsforthetimebeingoutstanding,oratanyadjourned

metingtwormorepersonsbeingorepresentingBondholderswhatevertheprincipal

amountoftheBondsheldorepresented,unlesthebusinesofsuchmetingincludes

considerationofproposals,interalia,(i)tomodifythematurityoftheBondsorthedateson

whichinterestorpremium(ifany)ispayableinrespectoftheBondsoralterthemethodof

calculatingtheamountofanypaymentinrespectoftheBonds,(i)toreduceorcancelthe

principalamountof,anypremiumpayableonredemptionof,orintereston,theBonds,(i)

tochangethecurencyofpaymentoftheBonds,(iv)toefecthexchange,conversionor

substitutionoftheBondsforotherobligationsorsecurities,(v)tomodifytheprovisions

concerningthequorumrequiredatanymetingofBondholdersorthemajorityrequiredto

pasanExtraordinaryResolution,or(vi)tomodifyorcanceltheGuarante(subjecto

Condition12(b),inwhichcasethenecesaryquorumwilbetwormorepersonsholdingor

representingholdersofnotlesthan662/3percent.,oratanyadjournedmetingnotles

than331/3percent.,inagregateprincipalamountoftheBondsforthetimebeing

outstanding.AnyExtraordinaryResolutiondulypasedshalbebindingonBondholders

(whetherornotheywerepresentorvotedathemetingatwhichsuchresolutionwas

pased).

TheTrustDedprovidesthataresolution(A)inwritingsignedbyoronbehalfoftheholders

ofnotlesthan90percent.inagregateprincipalamountoftheBondsforthetimebeing

outstanding,or(B)pasedbyElectronicConsent(asdefinedintheTrustDed)shalforal

purposesbeasvalidandefectiveasanExtraordinaryResolutionpasedatametingof

Bondholdersdulyconvenedandheld.Aresolutionpasedinwritingasaforesaidand/or

pasedbyElectronicConsentwilbebindingonalBondholderswhetherornothey

participatedinsuchresolution.Sucharesolutioninwritingmaybecontainedinone

documentorseveraldocumentsinthesameform,eachsignedbyoronbehalfofoneormore

Bondholders.

(b)ModificationofAgrementsandDeds

TheTrustemay(butshalnotbeobligedto)agre,withoutheconsentoftheBondholders,

to(i)anymodificationofanyoftheseConditionsoranyoftheprovisionsoftheTrustDed

ortheAgencyAgrement,thatisinitsopinionofaformal,minorortechnicalnatureoris

madetocorectamanifesterororistocomplywithanymandatoryprovisionofaplicable

law,and(i)anyothermodification(exceptasmentionedintheTrustDed),andanywaiver

orauthorisationofanybreachorproposedbreach,ofanyoftheseConditionsoranyofthe

provisionsoftheTrustDedortheAgencyAgrementhatisintheopinionoftheTruste

notmaterialyprejudicialtotheinterestsoftheBondholders.Anysuchmodification,

authorisationorwaivershalbebindingontheBondholdersand,unlestheTruste

otherwiseagres,suchmodification,authorisationorwaivershalbenotifiedbytheIsueror

theGuarantortotheBondholdersasonaspracticable.

(c)EntitlementoftheTruste

Inconectionwiththeperformanceandexerciseofitsfunctions,rights,powersand

discretions(includingbutnotlimitedtothosereferedtointhisCondition12)theTruste

shalhaveregardtotheinterestsoftheBondholdersasaclasandshalnothaveregardto

theconsequencesofsuchexerciseforindividualBondholdersandtheTrusteshalnotbe

entitledtorequireonbehalfofanyBondholder,norshalanyBondholderbentitledto

claim,fromtheIsuer,theGuarantorortheTrusteanyindemnificationorpaymentin

respectofanytaxconsequenceofanysuchexerciseuponindividualBondholders.

13.ENFORCEMENT

AtanytimeaftertheBondsbecomedueandpayable,theTrustemay(butshalnotbeobligedto),

atitsabsolutediscretionandwithoutfurthernotice,takesuchstepsand/oractionsand/orinstitute

suchprocedingsagainstheIsuerand/ortheGuarantorasitmaythinkfitoenforcethetermsof

theTrustDed,theAgencyAgrementand/ortheBonds(asthecasemaybe),butitnednotake

anysuchstepsand/oractionsand/orinstitutesuchprocedingsunles(a)itshalhavebenso

directedbyanExtraordinaryResolutionorsorequestedinwritingbyBondholdersholdingatleast

25percent.inagregateprincipalamountoftheBondsoutstanding,and(b)itshalhaveben

indemnifiedand/orsecuredand/orpre-fundedtoitsatisfaction.NoBondholdermayproced

directlyagainstheIsuerortheGuarantorunlestheTruste,havingbecomeboundsoto

proced,failstodosowithinareasonabletimeandsuchfailureiscontinuing.

14.INDEMNIFICATIONOFTHETRUSTE

TheTrustDedcontainsprovisionsfortheindemnificationoftheTrusteandforitsreliefrom

responsibility,includingprovisionsrelievingitfromtakingstepsand/oractionsand/orinstituting

procedingstoenforcepaymentunlesfirstindemnifiedand/orsecuredand/orpre-fundedtoits

satisfactionandfortheTrustetobepaidoreimbursedforanyfes,costs,expensesand

indemnitypaymentsandforliabilitiesincuredbyitinprioritytotheclaimsoftheBondholders.

TheTrusteisentitledtoenterintobusinestransactionswiththeIsuer,theGuarantor,any

subsidiaryoftheIsuerand/ortheGuarantorand/oranyentityrelated(directlyorindirectly)to

theIsuerortheGuarantorwithoutacountingforanyprofit.

NoneoftheTrusteoranyoftheAgentshalberesponsibleorliablefortheperformance

(financialorotherwise)bytheIsuer,theGuarantorandanyotherpersonapointedbytheIsuer

and/ortheGuarantorinrelationtotheBondsofthedutiesandobligationsontheirpartexpresed

inrespectofthesameand,unlesithasexpreswritenoticefromtheIsuerortheGuarantorto

thecontrary,theTrusteandeachAgentshalbentitledtoasumethathesamearebeingduly

performed.NoneoftheTrusteoranyAgentshalbeliabletoanyBondholderoranyotherperson

foranyactiontakenbytheTrusteorsuchAgentinacordancewithanyinstruction,direction,

requestoresolutionoftheBondholders.

WhenevertheTrusteisrequiredorentitledbythetermsoftheTrustDedortheseConditionsto

exerciseanydiscretionorpower,takeorefrainfromtakinganyaction,makeanydecisionorgive

anydirectionorcertification,theTrusteisentitled,priortoitsexercisinganysuchdiscretionor

power,takingorefrainingfromtakinganysuchaction,makinganysuchdecisionorcertification,

orgivinganysuchdirectionorclarificationofanydirection,tosekdirectionsorinstructions

fromtheBondholdersbywayofanExtraordinaryResolution(asdefinedintheTrustDed),and

theTrusteshalnotberesponsibleforanylosorliabilityincuredbytheIsuer,theGuarantor,

Bondholders,oranyotherpersonasaresultofanydelayinitexercisingsuchdiscretionorpower,

takingsuchaction,makingsuchdecision,orgivingsuchdirectionasaresultofsekingsuch

directionsorinstructionsfromtheBondholdersorintheventhatnodirectionsorinstructions

aregiventotheTrustebytheBondholders.

TheTrusteshalnotbeunderanyobligationtomonitororsupervisecompliancebytheIsueror

theGuarantorwiththeprovisionsoftheTrustDed,theAgencyAgrementortheseConditionsor

tomonitorortakeanystepstoascertainwhetheranEventofDefaultoraPotentialEventof

DefaultoraChangeofControlhasocured,anditshalnotberesponsibleorliabletotheIsuer,

theGuarantor,theBondholdersoranyotherpersonfornotdoingso.

TheTrustemayrelyconclusivelywithoutfurtherenquiryandwithoutliabilitytotheIsuer,the

Guarantor,theBondholdersoranyotherpersononanyreport,confirmationorcertificateor

informationoranyadviceoropinionofanylegalcounsel,acountants,financialadvisers,

financialinstitutionoranyotherexpert,whetherornotobtainedbyoradresedtoitandwhether

theirliabilityinrelationtheretoislimited(byitstermsorbyanyengagementleterelating

theretoenteredintobytheTrusteoranyotherpersoninanyothermaner)byreferencetoa

monetarycap,methodologyorotherwise.TheTrustemayaceptandshalbentitledtorely

conclusivelywithoutfurtherenquiryonanysuchreport,confirmation,certificate,information,

adviceoropinion,inwhicheventsuchreport,confirmation,certificate,information,adviceor

opinionshalbebindingontheIsuer,theGuarantorandtheBondholders.TheTrusteandthe

AgentshalnotberesponsibleorliabletotheIsuer,theGuarantorandtheBondholdersorany

otherpersonforanylosocasionedbyactingonorefrainingfromactingonanysuchreport,

information,confirmation,certificate,opinionoradvice.

EachBondholdershalbesolelyresponsibleformakingandcontinuingtomakeitsown

independentapraisalofandinvestigationintothefinancialcondition,creditworthines,

condition,afairs,statusandnatureoftheIsuer,theGuarantororanyoftheirespective

Subsidiaries,andtheTrusteshalnotatanytimehaveanyresponsibilityorliabilityforthesame

andnoparty(includinganyBondholder)shalrelyontheTrusteinrespecthereof.

15.FURTHERISUES

TheIsuermayfromtimetotimewithoutheconsentoftheBondholderscreateandisuefurther

bondseitherhavingthesametermsandconditionsastheBondsinalrespectsorinalrespects

exceptfortheisuedateandthefirstpaymentofinterestonthem,andsothatsuchfurtherisue

shalbeconsolidatedandformasingleserieswiththeoutstandingBonds.Referencesinthese

ConditionstotheBondsinclude(unlesthecontextrequiresotherwise)anyothersecuritiesisued

pursuantothisCondition15andformingasingleserieswiththeBonds.Anyfurtherbonds

formingasingleserieswiththeoutstandingBondsconstitutedbytheTrustDedoranyded

suplementaltoitshal,andanyotherbondsmay(withtheconsentoftheTruste),beconstituted

byadedsuplementaltotheTrustDed.

16.NOTICES

NoticestotheholdersofBondshalbeinEnglishandmailedtothematheirespective

adresesintheRegisterandemedtohavebengivenonthefourthbusinesday(beingaday

otherthanaSaturday,aSundayorapublicholiday)afterthedateofmailingand,solongasthe

Bondsarelistedonastockexchangeandtherulesofthatexchangesorequire,publishedbythe

IsueratheIsuer’sexpenseinamanerthatcomplieswiththerulesandregulationsofthatstock

exchange.Ifanysuchpublicationisnotpracticable,noticeshalbevalidlygivenifpublishedin

anotherleadingdailyEnglishlanguagenewspaperwithgeneralcirculationinAsia.Anysuch

noticeshalbedemedtohavebengivenonthedateofsuchpublicationor,ifpublishedmore

thanonceorondiferentdates,onthefirstdateonwhichpublicationismade,asprovidedabove.

Anysuchnoticeshalbedemedtohavebengivenonthedateofsuchpublicationor,if

publishedmorethanonceorondiferentdates,onthefirstdateonwhichsuchpublicationis

made,asprovidedabove.

SolongastheBondsarerepresentedbytheGlobalCertificateandtheGlobalCertificateisheld

initsentiretyonbehalfofEuroclearBankSA/NVandClearstreamBankingS.A.,anynoticetothe

holdersoftheBondshalbevalidlygivenbythedeliveryoftherelevantnoticetoEuroclearBank

SA/NVandClearstreamBankingS.A.forcomunicationbytherelevantclearingsystemto

entitledacountholdersinsubstitutionfornotificationasrequiredbytheseConditionsandshal

bedemedtohavebengivenonthedateofdeliverytosuchclearingsystem.

17.CONTRACTS(RIGHTSOFTHIRDPARTIES)ACT1999

NopersonshalhaveanyrightoenforceanytermorconditionoftheBondsortheTrustDed

undertheContracts(RightsofThirdParties)Act1999.

18.GOVERNINGLAWANDJURISDICTION

(a)GoverningLaw

TheTrustDed,theAgencyAgrement,theBonds,theGuaranteandanynon-contractual

obligationsarisingoutoforinconectionwiththemaregovernedby,andshalbeconstrued

inacordancewith,Englishlaw.

(b)Jurisdiction

ThecourtsofHongKongaretohavexclusivejurisdictiontosetleanydisputesthatmay

ariseoutoforinconectionwiththeBonds,theTrustDedortheAgencyAgrementand

acordinglyanylegalactionorprocedingsarisingoutoforinconectionwithanyBonds,

theTrustDedortheAgencyAgrement(“Procedings”)shalbebroughtinthecourtsof

HongKong.EachoftheIsuerandtheGuarantorirevocablysubmitstothejurisdictionof

suchcourtsandwaivesanyobjectiontoProcedingsinsuchcourtswhetheronthegroundof

venueoronthegroundthatheProcedingshavebenbroughtinaninconvenientforum.

(c)ServiceofProces

TheIsuerhasirevocablyapointedtheGuarantor(whoseprincipalplaceofbusinesin

HongKongiscurentlyat32ndFlor,FarEastFinanceCentre,16HarcourtRoad),to

receiveserviceofprocesinanyProcedingsinHongKong,andtheGuarantorhasacepted

suchapointment.Suchserviceshalbedemedcompletedondeliverytosuchagent

(whetherornotitisforwardedtoandreceivedbytheIsuer).Iforanyreasonsuchagent

ceasestobeabletoactasuchornolongerhasanadresinHongKong,eachoftheIsuer

andtheGuarantorirevocablyagrestoforthwithapointasubstituteprocesagentinHong

KongtoaceptserviceofprocesonbehalfoftheIsuerandtheGuarantorandelivertothe

TrusteandtheAgentsacopyoftheprocesagent’saceptanceofthatapointmentwithin

30daysofsuchcesation.Nothingshalafectherightoserveprocesinanymaner

permitedbylaw.

(d)WaiverofImunity

EachoftheIsuerandtheGuarantorhas,pursuantotheTrustDed,waivedanyrighto

claimsovereignorotherimunityfromjurisdictionorexecutionandanysimilardefence,

andhasirevocablyconsentedtothegivingofanyreliefortheisueofanyproces,

including,withoutlimitation,themaking,enforcementorexecutionagainstanyproperty

whatsoever(irespectiveofitsuseorintendeduse)ofanyorderorjudgmentmadeorgiven

inconectionwithanyProcedings.

SUMARYOFPROVISIONSRELATING

TOTHEBONDSINGLOBALFORM

TheGlobalCertificatecontainsprovisionswhichaplytotheBondsinrespectofwhichaGlobal

Certificateisisued,someofwhichmodifythefectoftheTermsandConditionsoftheBondsetoutin

thisOferingCircular.TermsdefinedintheTermsandConditionsoftheBondshavethesamemeaning

intheparagraphsbelow.Thefolowingisasumaryofthoseprovisions:

TheBondswilbevidencedbyaGlobalCertificateregisteredinthenameofanomineof,and

depositedwith,acomondepositoryforEuroclearandClearstream.

PromisetoPay

UndertheGlobalCertificate,theIsuerpromisestopaysuchprincipal,interestandsuchothersumsand

aditionalamounts(ifany)asmaybepayableundertheTermsandConditionsoftheBondsonthe

BondstotheholderoftheBondsonsuchdateordatesasthesamemaybecomepayableinacordance

withtheTermsandConditionsoftheBonds.

Eachpaymentwilbemadeto,ortotheorderof,thepersonwhosenameisenteredontheRegisterat

thecloseofbusinesontheClearingSystemBusinesDayimediatelypriortothedateforpayment,

where“ClearingSystemBusinesDay”meansaMondaytoFriday,inclusivexcept25Decemberand

1January.

ExchangeofBondsRepresentedbyGlobalCertificate

OwnersofinterestsintheBondsinrespectofwhichtheGlobalCertificateisisuedwilbentitledto

havetitletotheBondsregisteredintheirnamesandtoreceiveindividualdefinitiveCertificatesifeither

EuroclearorClearstreamoranyotherclearingsystemselectedbytheIsuerandaprovedinwritingby

theTruste,thePrincipalPayingAgentandtheRegistrar(an“AlternativeClearingSystem”)isclosed

forbusinesforacontinuousperiodof14days(otherthanbyreasonofholidays,statutoryorotherwise)

oranouncesanintentionpermanentlytoceasebusinesordoesinfactdoso.Insuchcircumstances,

theIsueratitsownexpensewilcausesuficientindividualdefinitiveCertificatestobexecutedand

deliveredtotheRegistrarforcompletion,authenticationandespatchtotherelevantholdersofthe

Bonds.ApersonwithaninterestintheBondsinrespectofwhichtheGlobalCertificateisisuedmust

providetheRegistrarnotlesthan30days’noticeatitspecifiedoficeofsucholder’sintentionto

efectsuchexchangeandawritenordercontaininginstructionsandsuchotherinformationasthe

IsuerandtheRegistrarmayrequiretocomplete,executeandeliversuchindividualdefinitive

Certificates.

Notices

SolongastheBondsarerepresentedbytheGlobalCertificateandtheGlobalCertificateisheldon

behalfofEuroclearorClearstreamoranyAlternativeClearingSystem,noticestoholdersoftheBonds

shalbegivenbydeliveryoftherelevantnoticetoEuroclearorClearstreamorsuchAlternative

ClearingSystem,forcomunicationbyitoacountholdersentitledtoaninterestintheBondsin

substitutionfornotificationasrequiredbytheConditions.

Metings

ForthepurposesofanymetingofBondholders,eacholderoftheBondsrepresentedbytheGlobal

Certificateshal(unlestheGlobalCertificaterepresentsonlyoneBond)betreatedastwopersonsfor

thepurposesofanyquorumrequirementsofametingofBondholdersandasbeingentitledtonevote

inrespectofeachU.S.$1,000inominalamountofBondsforwhichtheGlobalCertificateisisued.

Bondholder’sRedemption

TheBondholder’sredemptionoptioninCondition6(c)maybexercisedbytheholderoftheGlobal

CertificategivingnoticetothePrincipalPayingAgentwithinthetimelimitspecifiedintheTermsand

ConditionsoftheBonds,inacordancewiththerulesandproceduresofEuroclearandClearstreamor

anyAlternativeClearingSystem,andstatingtheprincipalamountofBondsinrespectofwhichthe

optionisexercisedwithinthetimelimitspecifiedintheTermsandConditionsoftheBonds.

Isuer’sRedemption

TheIsuer’sredemptionoptionprovidedforinCondition6(b)shalbexercisedbytheIsuergiving

noticetotheBondholderswithinthetimelimitsetoutinandcontainingtheinformationrequiredby

theTermsandConditionsoftheBonds.

Transfers

TransfersofbeneficialinterestsintheBondsrepresentedbytheGlobalCertificatewilbefected

throughtherecordsofEuroclearandClearstream(oranyAlternativeClearingSystem)andtheir

respectiveparticipantsinacordancewiththerulesandproceduresofEuroclearandClearstream(or

anyAlternativeClearingSystem)andtheirespectivedirectandindirectparticipants.

Cancelation

CancelationofanyBondrepresentedbytheGlobalCertificatethatisrequiredbytheConditionstobe

canceled(otherthanuponitsredemption)shalbefectedbyareductionintheagregateprincipal

amountoftheBondsintheregisterofBondholdersandtheGlobalCertificateonitspresentationtor

totheorderoftheRegistrarforanotation(forinformationonly)intheScheduletotheGlobal

Certificate.

Truste’sPowers

InconsideringtheinterestsofBondholderswhiletheGlobalCertificateisregisteredinthenameofa

nomineforaclearingsystem,theTrustemay,tothextentitconsidersitapropriatetodosointhe

circumstances,butwithoutbeingobligedtodoso,(i)haveregardtoanyinformationasmayhaveben

madeavailabletoitbyoronbehalfoftherelevantclearingsystemoritsoperatorastotheidentityofits

acountholders(eitherindividualyorbywayofcategory)withentitlementsinrespectoftheBondsand

(i)considersuchinterestsonthebasisthatsuchacountholdersweretheholdersoftheBondsin

respectofwhichtheGlobalCertificateisisued.

INDUSTRYOVERVIEW

Certaininformationandstatisticsetoutinthesectionbelowisforinformationpurposesonlyandis

basedon,orderivedorextractedfrom,amongothersources,governmentpublications,marketdata

providers,comunicationswithvariousPRCgovernmentagenciesorotherindependenthirdparty

sourcesunlesotherwiseindicated.Suchinformationisubjectochangeandcanotbeverifiedwith

completecertaintyduetolimitsontheavailabilityandreliabilityoftherawdatandotherlimitations

anduncertaintiesinherentinanymarketstudyandstatisticalsurvey.NoneoftheIsuer,theGuarantor,

theArangers,theDealers,theTruste,theAgentsoranyoftheirespectiveafiliates,directors,

oficers,employes,representatives,advisers,agentsandeachpersonwhocontrolsanyofthemorany

otherpartyinvolvedintheoferinghasindependentlyverifiedsuchinformation.Theinformationmay

notbeconsistentwithotherinformationcompiledwithinoroutsidethePRC.Acordingly,such

informationshouldnotbeundulyreliedupon.

Theglobalaviationindustryhasprovenresilientandregainsgrowthmomentum

Thedevelopmentoftheglobalaviationindustryisdrivenbythemarketdemandforairtransportation,

whichislargelydependentonglobaleconomicgrowth.Overthe10yearsfrom2010to2020,global

realgrosdomesticproductgrewatanaverageanualrateofaproximately3.1%acordingtothe

InternationalMonetaryFundwhileglobalRPKgrewatananualrateofaproximately6.4%betwen

2010and2019.Infact,2019presentedthesuper-cycleofgrowthinaviation,witharecordtenth

consecutiveyearofglobalairlineprofitabilityandthefifthighestlevelofprofitsrecorded.Thefactors

whichaveledtothisincreaseincludemergingeconomies,increasedtourismandcontinued

liberalizationofairtravel.TheCOVID-19pandemicpostedunprecedentedisruptionstotheindustry.

TheInternationalAirTransportAsociation(“IATA”)reportedthatcolectiveairlineprofitandlosfel

fromaprofitUSD26.4biliontoalosofUSD126.4bilionin2020,withglobalRPKshrunkenby

66%.

Nevertheles,airtravelisreturningtopre-pandemicratesastheaviationindustryhasprovenresilient

overthepastdecades.Therehasbenarobustreboundinaviationdemandastravelrestrictionswere

liftedandtheCOVID-19pandemicsubsided.In2022,airpasengertraficgainedmomentumglobaly

andrecoveredsubstantialyto68.5%of2019RPK.Thisrecoverycontinuedthrough2023,withglobal

airtraficreaching94.1%ofpre-pandemiclevelsandenteringanewgrowthcyclein2024.

AcordingtothedatafromtheIATA,totalglobalairtrafic(measuredinRPKs)in2024increasedby

10.4%year-on-yearwhiletheoveraloadfactoreachedahistoricalhighof83.5%.

InJune2025,IATAanouncedupdatestoairlineindustryfinancialoutlok,showingimproved

profitabilityin2025over2024.With4.99biliontotaltravelernumbersprojected,industryrevenues

for2025arexpectedtoreachahistoricalhighofU.S.$979bilionwhiletheindustry’snetprofitswere

expectedtoreachU.S.$36bilion.

TheChineseaviationmarkethasbouncedbacksignificantlyaftertheCOVID-19pandemic

AsChinaeaseditsCOVID-19pandemicontrolandreopeneditsborderinthebeginingof2023,air

traficinChinahascontinueditstrongreboundeversince.CivilAviationAdministrationofChina

(“CAC”)datashowedrobustdemandwithpasengervolumereachedhistoricalhighof730milionin

2024,up17.9%year-on-year.Airlinesreturnedtoprofitability,recordingRMB4.47bilioninetprofit,

aRMB10.2bilionincreasecomparedwiththatin2023.

BothAirbusandBoeingpredictedthatheworld’slargestraficflowintheyearsfrom2019to2043

wilbeindomesticPRCmarket,withCAGRof5%.Airbuspredictedthat9,520newpasengeraircraft

wouldbedeliveredtothePRCmarketinthenext20years,acountingfor22.4%ofglobalnew

deliveriesofpasengeraircraftbetwen2024and2043,markingChinathesinglelargestcountryfor

newdeliveries.AirbusisbuildingitsecondfinalasemblylineatitsfactoryinTianjin,China,which

wilefectivelydoubleitsproductioncapacityoftheA320familyatTianjinfactory.Thisdemonstrates

thesignificanceoftheChinesemarket.

Suply-demandynamicmanifestsingle-aisleshortagewithrisingmarketvaluesandleaserates

Onthedemandside,single-aisleaircraftdominatesglobalpasengerfletandisexpectedtofurther

increaseitsmarketshareintheforeseablefuture.Airbuspredictsinthe“GlobalMarketForecast2024”

thatheworldwilned33,510newsingle-aisleaircraftinthenext20years,acountingfor81%of

globalnewpasengeraircraftdemand,similartoBoeing’sforecastsin“ComercialMarketOutlok

2024-2043”.

Onthesuplyside,whileAirbusmiseditsanualdeliverytargetfor2024,Boeing’sful-year

deliveriesdeclinedbyover30%year-on-year.Thecontinuingsuplyshortagefurtherpushedupaircraft

leaseratesandvalues.Therisingdemandamidongoingsuplychainisues,coupledwithighinflation

andinterestrates,hasdrivenupmarketvalueandleaserates,especialyforsingle-aisleaircraftinthe

pastwoyears.Itisgeneralyexpectedthathenarowbodyaircraftshortagewouldlikelypersistfora

coupleofyears,contributingtohighermarketvaluesandleaserates.

Aircraftlesors’roletobemoredominantpost-pandemic

Asoposedtodirectownership,aircraftleasingrequireslescapitalinvestmentandprovidesmoreflet

planingflexibility.Insteadofowningacomercialaircraftformorethan20years,anairlinecanlease

anaircraftfor4to15yearsdependingonitsbusinesandoperationalneds.Operatingleasesalow

airlinestomaintaintheoperationofaircraftwhileloweringtheiroperatingcostsathesametime.They

alsoenableairlinestoarangetheirfletandmanagetheirbalanceshetswithgreaterflexibilityandto

avoidtheresidualvalueriskoftheaircraft.

Leasingpenetrationratehasteadilyclimbedupfromlowsingledigitstoaround46%beforetheon-set

oftheCOVID-19pandemic.Therehasbenincreasedpurchaseandleasebackactivitiesince2020for

bothnewandusedaircraft,drivingleasingpenetrationpast50%inthepasengersingle-aisleand

twin-aislemarkets.Withairlinestrivingtoprotectcashandgenerateliquidity,leasingprovedtobe

increasinglypopularduringthispecialperiod.Meanwhile,airlines,emergentlow-costcariersin

particular,arenowmorepronetoturntoaircraftlesorsforaircraftasetmanagementastheyreiterate

theirfocustowardspasengerserviceinthemidstofafiercelycompetitivelandscape.

TheaircraftleasingmarketinChinahasalsogrownsignificantly.Previously,themarketwasdominated

byforeignleasingcompanies,however,themarketshareofChineseaircraftleasingcompanieshas

increasedsubstantialysincethethenChinaBankingRegulatoryComisionrelaxeditsregulationson

aircraftleasinginJanuary2007.Inadition,underthecurentaxregime,Chineseairlinesare

exemptedfrompayingwitholdingtaxwhenleasingaircraftfromChineseleasingcompanies,which

sharpensthecompetitivenesoftheChineseaircraftleasingcompaniesontheirhometurf.Nowadays,

demandfromChineseairlinesarebecomingmorecomplexastheirfletstartoage,increasingdemand

notonlyforsourcesofcapital,butalsoforprofesionalaircraftasetmanagement.Therefore,theyare

moreinclinedtoworkwithprofesionalaircraftasetmanagerstodevelopmorecomprehensivelease

structuresandprovideone-stopservicestorealizeintegratedfletmanagementoacomplishbeter

costeficiency.

DESCRIPTIONOFTHEISUER

FORMATION

TheIsuerisaBVIbusinescompanyincorporatedwithlimitedliabilityon26October2017inthe

BritishVirginIslandsundertheBusinesCompaniesAct,2004(asamended)oftheBritishVirgin

Islands(BVICompanyNumber1958966).Itisadirectwholy-ownedsubsidiaryoftheGuarantor.The

Isuerhasnomaterialasetsandwilconductnobusinesexceptinconectionwiththestablishment

oftheisuanceoftheBonds.TheIsuer’sregisteredoficeisatVistraCorporateServicesCentre,

WickhamsCayI,RoadTown,Tortola,VG1110,BritishVirginIslands.

BUSINESACTIVITY

TheIsuerwasestablishedpursuantotheobjectsandpowersetoutinitsmemorandumofasociation.

TheIsuerdoesnotselanyproductsorprovideanyservicesandhasundertakenobusinesactivities

sincethedateofitsincorporation,otherthanthoseincidentaltoitsincorporation;andinconection

withtheisueofdebtsecuritiesandanyotheractivitiesinconectiontherewithorincidentalthereto

(suchactivitieshal,fortheavoidanceofdoubt,includetheofering,saleorisuanceofthedebt

securities(includingtheBonds),and(i)theon-lendingoftheprocedsoftheisueofthedebt

securities(includingtheBonds)totheGuarantororanyotherSubsidiariesoftheGuarantor).

FINANCIALSTATEMENTS

UnderBritishVirginIslandslaw,theIsuerisrequiredtofileafinancialanualreturnwithits

registeredagentintheBritishVirginIslandswithininemonthsafterthendofeachyeartowhichthe

financialanualreturnrelates.

DIRECTORS

ThedirectorsoftheIsuerareXieZhihuanandLauWaiShing.TangYuPingisapointedasalternative

directortoLauWaiShing.ThedirectorsoftheIsuerdonotholdanysharesoroptionstoacquireshares

oftheIsuer.TheIsuerdoesnothaveanyemployesandhasnosubsidiaries.

SHARECAPITAL

TheIsuerisauthorisedunderitsmemorandumofasociationtoisueamaximumof50,000shares

eachwithnoparvalueofasingleclasandonesharehasbenisuedtoandheldbytheGuarantor.The

registerofmembersoftheIsuerismaintainedatitsregisteredoficeinBritishVirginIslandsathe

oficesofitsregisteredagent.NopartofthequitysecuritiesoftheIsuerislistedordealtonanystock

exchangeandnolistingorpermisiontodealinsuchsecuritiesisbeingorisproposedtobesought.As

athedateofthisOferingCircular,theIsuerdoesnothaveanydebtoutstanding.

DESCRIPTIONOFTHEGROUP

OVERVIEW

Weareanindependentinternationalaircraftleasingcompanyaswelasaone-stopaircraftsolutions

providerengagingintwomajorsegments,aircraftleasingandaviationaftermarketservices.Unlike

traditionalaircraftlesors,weareaone-stopaircraftfulife-cyclesolutionsproviderforglobalairlines

andaircraftasetowners.TheGroup’sconventionalbusinesincludesprovisionofaircraftoperating

leasing,purchaseandleaseback,portfoliotradingandasetmanagement.TheGroupalsocoverscore

value-adedservicesuchasfletupgrades,MRO,aircraftdisasemblyandcomponentsalesthrough

ourasociatecompanyARIandairlineoperationservicesthroughourjointventure,TAM.