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Overview

ICBC Leasing enters into a sale-and-leaseback agreement worth $620 million USD with Qatar Airways for six Boeing 787-8 aircraft

Commitments (Constant USD, 2023)$676,247,375
Commitment Year•2016Country of Activity•QatarDirect Recipient Country of Incorporation•QatarSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Nov 4, 2016
Start (actual)
Nov 3, 2016
End (actual)
Nov 4, 2016
Last repayment (originally scheduled)
Nov 1, 2028

Geospatial footprint

Map overview

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This project provided a sale-and-leaseback agreement for six Boeing aircraft to Qatar Airways Company Q.C.S.C., which is headquartered at Tower 1, Next to Al Mana Building, Doha, Qatar. More detailed locational information can be found at: https://www.openstreetmap.org/way/1263885019.

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

State-owned companies

  • Qatar Airways Company Q.C.S.C.

Loan desecription

ICBC Leasing enters into a sale-and-leaseback agreement worth $620 million USD with Qatar Airways for six Boeing 787-8 aircraft

Interest type•UnknownMaturity•12 years

Narrative

Full Description

Project narrative

On November 3 and 4, 2016, financial close was reached on a deal in which 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 sale-and-leaseback agreement worth $620 million USD with Qatar Airways Company Q.C.S.C. — the flag carrier airline of Qatar wholly owned by the Government of Qatar — for six Boeing 787-8 aircraft. ICBCFL would lease the six aircraft (MSNs 38343, 38344, 38345, 38346, 38347, and 38348) on operating leases with tenors varying between 11 and 12 years to Qatar Airways. The sale-and-leaseback for MSN 38344, 38346, and 38347 closed on November 3 and MSN 38343, 38345, and 38348 on November 4, 2016. The use of the proceeds of the sale-and-leaseback were to be used by the borrower for general corporate purposes. ICBCFL entered into a $420 million USD loan agreement with the Doha Branch of ICBC for four of the aircraft and a $200 million USD loan from the Singapore Branch of the Bank of Communications (BoComm) to finance the sale-and-leaseback. All aircraft were acquired by Qatar Airways new in 2016 except for MSN 38343 which was a 2015-vintage 787-8.

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. $620 million USD was assessed by industry media sources to be the value of this sale-and-leaseback agreement.