Budget carrier AirAsia, a part of the Capital A Bhd group, is seeking a $400 million loan, half of it from private credit funds, to refinance debt, according to people familiar with the matter.

The loan will be in the form of a revenue bond, with investors to be paid out of ticket sales from ten AirAsia flight routes, the people said, declining to be identified because the matter is private. A representative of the company declined to comment.

Capital A is no stranger to private credit. An engineering and maintenance subsidiary Asia Digital Engineering in April secured a $100 million investment from private-credit provider OCP Asia Ltd., according to a statement at the time.

Asia still accounts for a small percentage of the $1.5 trillion global private credit market, but major players such as Blackstone Inc. are targeting growth in the region. With global airline capacity returning to levels seen before the pandemic and industry earnings rebounding, the aviation industry has become a target for private credit lenders.