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Overview

Bank of China provides a $90 million USD finance lease to Norwegian Air Shuttle for two Boeing 737 MAX8 aircraft

Commitments (Constant USD, 2023)$90,566,666
Commitment Year•2018Country of Activity•NorwayDirect Recipient Country of Incorporation•NorwaySector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Nov 20, 2018
Last repayment (originally scheduled)
Nov 17, 2030

Geospatial footprint

Map overview

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This project supported the acquisition of two aircrafts by Norwegian Air Shuttle AOC AS, which is headquartered at Oksenoyveien 3, Postboks 115, Lysaker, 1336. More detailed locational information can be found at: https://www.openstreetmap.org/way/150976400.

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

  • Bank of China (BOC)

Receiving agencies

Private Sector

  • Norwegian Air Shuttle ASA

Insurance providers

Private Sector

  • Aircraft Finance Insurance Consortium (AFIC)

Security / collateral agents

Private Sector

  • Bank of Utah

Loan desecription

Bank of China provides a $90 million USD finance lease to Norwegian Air Shuttle for two Boeing 737 MAX8 aircraft

Interest type•UnknownMaturity•12 years

Collateral

This loan was secured by the two Boeing 787 MAX8 aircraft.

Narrative

Full Description

Project narrative

On June 1, 2018, the Bank of China (BOC) received a finance mandate for a finance lease + operating lease to Norwegian Air Shuttle ASA — a Norwegian low-cost airline listed on the Oslo Stock Exchange — for two Boeing 737 MAX8 aircraft. Then, on November 20, 2018, financial close was reached on a deal in which BOC entered into a finance lease and operating lease worth $90 million USD with Norwegian Air Shuttle ASA for two Boeing 737 MAX8 aircraft. This lease carried a maturity period of 12 years and was secured by (i.e. collateralized against) the aircraft. Aircraft Finance Insurance Consortium (AFIC) provided aircraft non-payment insurance (ANPI) for Norwegian Air Shuttle's payment obligation and the Bank of Utah served as security agent.

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. Norwegian Air Shuttle ASA is a Norwegian low-cost airline listed on the Oslo Stock Exchange. In 2020, after financial problems, BOC Aviation Limited became a major shareholder at 12.7%.