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Overview

CMB Financial Leasing leases three Airbus A320neo aircraft to Flynas in 2020

Commitment Year•2020Country of Activity•Saudi ArabiaDirect Recipient Country of Incorporation•Saudi ArabiaSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Feb 22, 2020
Start (actual)
Feb 1, 2020
End (actual)
Jul 1, 2020

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned companies

  • CMB Financial Leasing Co., Ltd. (CMB Financial Leasing) (CMBF) (CMBFL)

Receiving agencies

Private Sector

  • flynas Company LCC

Loan description

CMB Financial Leasing leases three Airbus A320neo aircraft to Flynas in 2020

Interest type•UnknownMaturity•12 years

Narrative

Full Description

Project narrative

In November 2018, CMB Financial Leasing Co., Ltd. (CMBFL) — a Chinese state-owned leasing company wholly owned by China Merchants Bank — entered into a preliminary sale-and-leaseback agreement with flynas Company LCC — a private Saudi low-cost airline headquartered in Riyadh — for three Airbus A320neo aircraft. Then, on February 22, 2020, the parties signed a mandate agreement, with CMBFL being formally charged to deliver the plans. Financial close was reached on September 30, 2020.The specific aircraft were three narrowbody Airbus A320neos. The aircraft would be on 12-year operating leases. In February 2020, the first A320neo was delivered to Flynas. On April 17, 2020, the second A320neo was delivered to Flynas. In July 2020, the third aircraft was delivered to Flynas.

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.