Jan 27 (Reuters) - Cathay Pacific Airways Ltd said on Wednesday it planned to sell five-year convertible bonds denominated in Hong Kong dollars, two days after the airline warned of rising cash burn due to tighter crew quarantine rules. Cathay plans to issue HK$6 billion ($774.04 million) of bonds, though that could be subject to a significant upsizing, two sources with knowledge of the deal told Reuters on condition of anonymity because they were not authorised to speak with media. The airline on Monday warned passenger capacity could be cut by about 60%, cargo capacity would fall by 25% and its monthly cash burn would rise if Hong Kong enacts new COVID-19 measures that would require flight crew to quarantine for two weeks upon their return home. Cathay said the expected move would increase monthly cash burn by around HK$300 million to HK$400 million, on top of the current HK$1 billion to HK$1.5 billion. Cathay on Wednesday told Hong Kong’s stock exchange it planned to issue convertible bonds to provide funding for general corporate purposes but it did not provide details of the terms and said a deal was not guaranteed. The bonds were being marketed with a coupon and yield-to-put/maturity of 2.25%–2.75% and a conversion premium of 30%–40%, according to Refinitiv publication IFR. Cathay declined to comment beyond its statement to the stock exchange. To help bolster its balance sheet while international borders remain closed, Cathay received a $5 billion rescue package led by the Hong Kong government last June. ($1 = 7.7515 Hong Kong dollars) (Reporting by Jamie Freed in Sydney and Anshuman Daga in Singapore; Additional reporting by Scott Murdoch in Hong Kong; Editing by Kim Coghill)