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Overview

ICBC Financial Leasing enters into a sale-and-leaseback agreement with Iberia Airlines for two Airbus A320neo aircraft

Commitment Year•2020Country of Activity•SpainDirect Recipient Country of Incorporation•SpainSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2020
Start (actual)
Jan 1, 2020
End (actual)
Jan 1, 2020

Stakeholders

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

Funding agencies

State-owned companies

  • ICBC Financial Leasing Co., Ltd. (ICBCFL) (ICBC Leasing)

Receiving agencies

Private Sector

  • Iberia Líneas Aéreas de España, S.A. Operadora (Iberia Airlines)

Loan description

ICBC Financial Leasing enters into a sale-and-leaseback agreement with Iberia Airlines for two Airbus A320neo aircraft

Interest type•Unknown

Narrative

Full Description

Project narrative

In 2020, 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 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 two Airbus A320neo aircraft. The aircraft were delivered in 2020.

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 in 2020. It may have been two separate sale-and-leaseback agreements, one for each of the two A320neo aircraft. This issue merits further investigation.