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Overview

CDB Aviation enters into a sale-and-leaseback agreement with United Airlines for two Boeing 787-9 Dreamliners and thirteen Boeing 737 MAX 8 aircraft

Commitment Year•2021Country of Activity•United StatesDirect Recipient Country of Incorporation•United StatesOverseas Jurisdiction•SingaporeSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jun 1, 2021
Start (actual)
Jan 1, 2020
End (actual)
Dec 31, 2021

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

  • BOC Aviation Limited

Receiving agencies

Private Sector

  • United Airlines, Inc.

Loan description

CDB Aviation enters into a sale-and-leaseback agreement with United Airlines for two Boeing 787-9 Dreamliners and thirteen Boeing 737 MAX 8 aircraft

Interest type•Unknown

Narrative

Full Description

Project narrative

In or around June 2021, CDB Aviation — the wholly-owned Ireland-based subsidiary of China Development Bank Financial Leasing Co., Limited — entered into a sale-and-leaseback agreement with United Airlines — a Delaware-incorporated, major American airline headquartered in Chicago, Illinois wholly-owned by United Airlines Holdings, Inc., a publicly traded airline holding company traded on the Nasdaq Stock Market — for two Boeing 787-9 Dreamliners and thirteen Boeing 737 MAX 8 aircraft. The aircraft were delivered between 2020 and 2021. The 787-9s are considered widebody aircraft, with 257-seats each and novel Polaris and Premium Plus cabin interiors. They are powered by General Electric GEnx engines. The 737 MAX 8 aircraft have a two-cabin interior and 166 seats. They are equipped with LEAP-1B engines from CFM International.

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.