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Overview

AVIC International Leasing enters into a sale-and-leaseback agreement worth $136 million USD for two Maltese-flagged LNG carriers

Commitments (Constant USD, 2023)$140,315,800
Commitment Year•2020Country of Activity•MaltaDirect Recipient Country of Incorporation•MaltaSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Sep 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

  • AVIC International Leasing Co., Ltd. (AVICL)

Receiving agencies

Private Sector

  • Unspecified Leasor for the Maltese-flagged LNG carriers Project

Loan description

AVIC International Leasing enters into a sale-and-leaseback agreement worth $136 million USD for two Maltese-flagged LNG carriers

Interest type•Unknown

Narrative

Full Description

Project narrative

Prior to September 2020, AVIC International Leasing Co., Ltd. (AVICL) — a Chinese state-owned leasing company and a wholly-owned subsidiary of Aviation Industry Corporation of China (AVIC) — entered into a sale-and-leaseback agreement valued at $136 million USD with an unspecified institution for two Maltese-flagged liquefied natural gas (LNG) carrier vessels.

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. Specific details about this sale-and-leaseback agreement, including the specific receiving institution and commitment date, is unknown. However, AidData has determined this agreement occurred prior to September 2020, as it is mentioned to exist in an Internet Archive page of a lawyer involved in the deal time-stamped to September 2020. This issue merits further investigation.