Narrative
Full Description
Project narrative
On December 5, 2009, financial close was reached on a deal in which BOC Aviation Limited — 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 two Airbus A320 aircraft. The use of the proceeds of the sale-and-leaseback agreement were to be used by Air Berlin for general corporate purposes. 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; two A320s from BOC Aviation were still on lease at the time of insolvency, presumably the same delivered in 2009
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. In aviation leasing, financial close often occurs after delivery of the final aircraft, with actual commitment earlier. Therefore, AidData assumes that this sale-and-leaseback was completed on or around December 5, 2009 and has marked the commitment_date_estimated? field for the commitment date. This issue merits further investigation for the specific delivery dates.