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Overview

BOC Aviation enters into a sale-and-leaseback agreement with International Airlines Group for eight Airbus A330-300 aircraft

Commitment Year•2012Country of Activity•SpainDirect Recipient Country of Incorporation•SpainOverseas Jurisdiction•SingaporeSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jul 1, 2012
Start (planned)
Jan 1, 2013
Start (actual)
Feb 1, 2013
End (planned)
Apr 1, 2014
End (actual)
May 1, 2014

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

  • BOC Aviation Limited

Receiving agencies

Private Sector

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

Loan description

BOC Aviation enters into a sale-and-leaseback agreement with International Airlines Group for eight Airbus A330-300 aircraft

Interest type•Unknown

Narrative

Full Description

Project narrative

In July 2012, BOC Aviation Limited — a Chinese state-owned leasing company — entered into a sale-and-leaseback agreement with 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 Airlines and British Airways plc — for eight Airbus A330-300 aircraft. The aircraft were scheduled to be delivered from January 2013 to April 2013. The eight aircraft were widebody. Iberia Líneas Aéreas de España, S.A. Operadora (Iberia Airlines),Spain's flag carrier airliner accepted the aircraft under the lease. The first aircraft was delivered in February 2013. In late November 2013, BOC Aviation delivered the fifth A330-300 (named after Spanish King Juan Carlos I). The last aircraft was delivered in May 2014.

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.