Narrative
Full Description
Project narrative
In May 2022, CDB Aviation Lease Finance DAC — the wholly-owned Ireland-based subsidiary of China Development Bank Financial Leasing Co., Limited (CDB Leasing) — entered into a sale-and-leaseback agreement with flynas Company LCC — a private Saudi low-cost airline headquartered in Riyadh — for an unspecified amount of Airbus A320neo aircraft. Concurrent with the CDB Aviation sale-and-leaseback agreement, flynas entered into sale-and-leaseback agreements with Chinese state-owned lessor CMB Financial Leasing and Avolon Aerospace Leasing Limited. These agreements collectively were for 14 Airbus A320neo aircraft and SAR 6.6 billion; the specific aircraft under each agreement is unknown. Deliveries of the aircraft under the agreements were scheduled between 2022 and 2023
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.