Narrative
Full Description
Project narrative
In April 2022, ICBC Aviation Leasing Company Limited — a Chinese state-owned leasing company and a wholly-owned subsidiary of ICBC Financial Leasing Co., Ltd. (ICBCFL) — entered into a sale-and-leaseback agreement worth an estimated $127 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 one Airbus 350-900 aircraft. The proceeds of the sale-and-leaseback agreement were to be used by the borrower for general corporate purposes. The widebody aircraft was delivered to Iberia Airlines in March 2022.
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. $127 million USD was assessed by industry media sources to be the value of this sale-and-leaseback agreement.