Narrative
Full Description
Project narrative
On or before February 1, 2010, BOC Aviation Limited — a Chinese state-owned leasing company — entered into a sale-and-lease-back agreement with Air Berlin PLC & Co. Luftverkehrs KG — a German airline, Germany's second largest, headquartered in Berlin — for three new Boeing 737-800 aircraft. All three aircraft were powered by CFM56-7B24/3 engines, and were expected for delivery in February, July, and August 2010. The last aircraft was delivered in early August 2010 and the transaction closed. On August 15, 2017, Air Berlin filed for insolvency after its key shareholder Etihad Airways announced it would no longer support the airliner after years of losses. At the time, BOC Aviation still was leasing two Boeing 737-800s to Air Berlin — possibly those under this sale-and-leaseback transaction.
Staff comments
1. A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset. The lessor is the legal owner of the asset, while the lessee obtains the right to use the asset in return for regular rental payments. Under a capital lease (a financial arrangement where the lessee/borrower uses an asset and pays regular installments plus interest to the lender/lessor), rental payments are usually classified as interest and obligation payments, similarly to a mortgage (with the interest calculated each rental period on the outstanding obligation balance). AidData codes capital leases as loans. 2. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products.