Narrative
Full Description
Project narrative
On June 27, 2023, the London Branch of the Bank of China (BOC) received a finance mandate from Jet2 plc — a British multinational airline company based in Leeds, England — to provide a £96 million GBP loan to finance the purchase of two new Airbus A321neo aircraft on order from Airbus via a Japanese operating lease with call option (JOLCO) transaction. NBB Worcester Lease Co., Ltd. — a Japan-incorporated special purpose vehicle (SPV) owned by Japanese investors — entered into an aircraft lease agreement on June 27, 2023 with Jet2 plc (as lessee), secured via a July 3, 2023 deed by an assignment of security related to the A321-251NX aircraft (MSN No. 11489) including insurance policies and requisition proceeds. NBB Bolton Lease Co., Ltd. — a Japan-incorporated SPV owned by Japanese investors — entered into an aircraft lease agreement on July 13, 2023 with Jet2 plc (as lessee), secured via a July 20, 2023 deed by an assignment of security related to the A321-251NX aircraft (MSN No. 11564) including insurance policies and requisition proceeds. BOC entered into the £96 million GBP loan agreement(s) with NBB Worcester Lease Co., Ltd. and NBB Bolton Lease Co., Ltd., which among other things, assigned Jet2's collateral to BOC. BOC London Branch served as sole arranger, facility, and security trustee, while BBAM Aircraft Leasing & Management was the equity arranger. Financial close was achieved on July 12, 2023, with first aircraft was delivered around that The second was scheduled to be delivered later in summer 2023, and had been delivered prior to October 2023.
Staff comments
1. A Japanese Operating Lease with Call Option financing (JOLCO) is a type of financing arrangement commonly used in the aviation and shipping industries. It involves a Japanese investor purchasing an asset, such as an aircraft or ship, and leasing it to an operator for a fixed period of time, typically ranging from 5 to 12 years. The lease payments cover the investor's costs, including the purchase price of the aircraft, interest payments, and fees. At the end of the lease term, the operator has the option to purchase the asset at a pre-agreed price, known as the "call option". The lenders typically lend to a special purpose vehicle (SPV) which then leases it to the operator.