CHINA Southern Airlines is to announce a pioneering US$245 million loan organised by the New York branches of the Bank of China and First National Bank of Chicago to finance the purchase of seven new aircraft. The loan, due to be signed next month, will be the first securitised loan made to a mainland company. The US Export Import Bank has undertaken to guarantee 85 per cent of the the loan, which will be in the form of securitised papers placed with potential investors. The Bank of China will provide the remaining 15 per cent of the financing. The money raised will be used by China Southern of Guangzhou to buy seven new B737-300s from Boeing, each costing US$35 million. The first of China Southern's new fleet was delivered earlier this week, using bridge financing. The remainder will be delivered in phases over the next six months. China Southern also has three larger B767-300s, each with a book price of around US$80 million. These will be financed separately. The airline, controlled by the Civil Aviation Administration of China (CAAC), is currently waiting for approval from the Chinese Government to list its shares on the New York Stock Exchange. This is the first aircraft financing organised by First National Bank of Chicago for a mainland airline. The bank has been mandated to organise a second deal for a different mainland carrier, but is refusing for the time being to reveal any details.