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Overview

ICBC Leasing enters into a sale-and-leaseback agreement worth $70 million USD with Air France for two Airbus A220-300 aircraft

Commitments (Constant USD, 2023)$64,549,915
Commitment Year•2021Country of Activity•FranceDirect Recipient Country of Incorporation•FranceSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Oct 1, 2021
Start (actual)
Dec 22, 2021
End (actual)
Mar 24, 2022

Geospatial footprint

Map overview

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The project was a sale and leaseback agreement in which Air France leased two Airbus A220-300 aircraft. Air France is headquartered at 45 Rue de Paris, 93290 Tremblay-en-France, France. More detailed locational information can be found at: https://www.openstreetmap.org/node/9395207054

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 companies

  • ICBC Financial Leasing Co., Ltd. (ICBCFL) (ICBC Leasing)

Receiving agencies

Private Sector

  • Air France S.A.

Loan desecription

ICBC Leasing enters into a sale-and-leaseback agreement worth $70 million USD with Air France for two Airbus A220-300 aircraft

Interest type•Unknown

Narrative

Full Description

Project narrative

In October 2021, ICBC Financial Leasing Co., Ltd. (ICBCFL; ICBC Leasing) — a Chinese state-owned leasing company and wholly-owned subsidiary of the Industrial and Commercial Bank of China (ICBC) — entered into a mandate agreement for a sale-and-leaseback agreement worth an estimated $70 million USD with Air France S.A. — the flag carrier airline of France and France-incorporated wholly-subsidiary of Franco-Dutch Air France-KLM S.A. — for two Airbus A220-300 aircraft. This agreement was secured. The use of the proceeds of the sale-and-leaseback were to be used by the borrower for general corporate purposes. The first aircraft was delivered on December 22, 2021, and the second was delivered on March 24, 2022. Financial close occurred on March 24, 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. $70 million USD was assessed by industry media sources to be the value of this sale-and-leaseback agreement.