Narrative
Full Description
Project narrative
On December 22, 2013, financial close was reached on a deal in which ICBC Financial Leasing Co., Ltd. (ICBC) — 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 with Tiger Airways Singapore Pte Ltd — a Singapore-incorporated and headquartered low cost airline and wholly-owned subsidiary of Tiger Airways Holdings Limited, listed on the Singapore Stock Exchange — for two Airbus A320 aircraft. The aircraft had manufacturer serial numbers 5915 and 5805. The agreement was secured by (i.e. collateralized against) the aircraft. The proceeds of the sale-and-leaseback were to be used by the borrower for general corporate purposes.
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. In aviation finance, financial close typically occurs on or around the delivery date of the final aircraft. As financial close occurred on December 22, 2013, the aircraft was almost certainly delivered on or around that date. Thus AidData has coded the actual_implementation_completion_date fields as December 22, 2013 and marked the actual_implementation_completion_date_estimated? fields as True. 4. The commitment date for the sale-and-leaseback agreement is unknown. For the time being, AidData has coded the financial closure date, March 1, 2014, as the commitment date and marked the commitment_date_estimated? field as True.