Narrative
Full Description
Project narrative
On December 23, 2020, financial close was reached on a deal in which ICBC Financial Leasing Co., Ltd. (ICBCFL) — a Chinese state-owned leasing company and wholly-owned subsidiary of the Industrial and Commercial Bank of China (ICBC) — entered into a sale-and-leaseback agreement worth an estimated $159 million USD 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 three Airbus A321neo aircraft. The specific aircraft were three narrowbody Airbus A321neo aircraft, to be operated by Iberia's subsidiary Iberia Express. The use of the proceeds of the sale-and-leaseback agreement were to be used by Iberia for general corporate purposes. The aircraft were delivered on December 23, 2020, as part of ICBCFL's first transaction with Iberia.
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. $159 million USD was assessed by industry media sources to be the value of this sale-and-leaseback agreement.