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Overview

BoCom Leasing enters into a sale-and-leaseback agreement with Air Berlin for three Airbus A321 aircraft

Commitment Year•2015Country of Activity•GermanyDirect Recipient Country of Incorporation•GermanySector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2015
Start (actual)
Feb 1, 2015
End (planned)
Sep 30, 2015
End (actual)
Aug 8, 2015
Last repayment (originally scheduled)
Dec 29, 2026

Stakeholders

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

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Commercial Banks

  • China Bank of Communications Financial Leasing Co., Ltd. (BoCom Leasing)

Receiving agencies

Private Sector

  • Air Berlin PLC & Co. Luftverkehrs KG

Loan description

BoCom Leasing enters into a sale-and-leaseback agreement with Air Berlin for three Airbus A321 aircraft

Interest type•UnknownMaturity•12 years

Narrative

Full Description

Project narrative

In or around 2015, Bank of Communications Financial Leasing Co., Ltd. (BoCom Leasing) — a Chinese state-owned leasing company — entered into a sale-and-leaseback agreement with Air Berlin PLC & Co. Luftverkehrs KG — a German airline, Germany's second largest, headquartered in Berlin — for three new Airbus A321 aircraft. The tenor of the operating leases under this agreement was 12 years. These aircraft were new narrowbody A321s, MSN 6454, MSN 6719, and MSN 6629. The use of the proceeds of the sale-and-leaseback agreement were to be used by Air Berlin or general corporate purposes. The first aircraft was delivered in February 2015, with the second and third expected to deliver by the third quarter of 2015. The third aircraft, MSN 6719, was delivered on August 8, 2015. Financial close was achieved on August 8, 2015. On August 15, 2017, Air Berlin filed for insolvency after its key shareholder Etihad Airways announced it would no longer support the airliner after years of losses. As of January 2018, some of the aircraft previously leased to Air Berlin by BoCom Leasing were leased to other lessors.

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.