Narrative
Full Description
Project narrative
Prior to April 2022, CCB Financial Leasing Co., Ltd. (CCBFL) — a Chinese state-owned leasing company and wholly-owned subsidiary of China Construction Bank Corporation (CCB) — entered into a sale-and-leaseback agreement with Iberia Líneas Aéreas de España, S.A. Operadora (Iberia Airlines) — Spain's flag carrier airliner and wholly-owned subsidiary of International Consolidated Airlines Group S.A., popularly known as International Airlines Group (IAG), a British-Spanish multinational airline holding company incorporated in Spain, headquartered in London, the United Kingdom, and listed on the London Stock Exchange and the Madrid Stock Exchange that owns Iberia and British Airways plc — for one Airbus A350-900 aircraft.
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. 3. The specific details of this sale-and-leaseback agreement is unknown. However, it is known it was completed prior to April 2022 and involved at least one A350-900 (as that is the minimum; it may have involved additional planes). This issue merits further investigation.