(Apr 22): BOC Aviation Ltd., a Singapore-based aircraft leasing company, is testing bond markets at a time when global passenger airlines are nearly shut due to the coronavirus pandemic.

The unit of Bank of China Ltd. is marketing dollar bonds at significantly wider spreads than similar debt sold in January. Since that time, the crisis has plunged the aviation industry into unprecedented difficulty, amid severe travel restrictions to curb the outbreak. Earlier this week, Virgin Australia Holdings Ltd. became the first carrier in Asia to collapse due to the pandemic.

BOC Aviation is offering five-year notes at a premium of 330 basis points over U.S. Treasuries, and may price the bonds today. That compares with 100 basis points for the debt it sold earlier this year.

The global aviation industry slump also brings challenges for aircraft leasing companies, of course. For one thing, if the companies they supply planes to were to stumble, they may face asset-recovery expenses.

But there have been some silver linings for the broader airline industry. Many national flagship carriers are considered too important to fail and some governments have signalled support.

BOC Aviation’s business offers some diversification to bond investors as it counts several airline companies as clients, according to Bloomberg Intelligence analyst James Teo.

“BOC Aviation has a strong balance sheet and stands to gain in present times as aircraft prices will remain depressed for a while and many airlines will now be even keener to do aircraft sale-and-leasebacks to raise cash,” he said.