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Overview

ICBC Leasing leases one Boeing 747-8 aircraft to Korean Air

Commitment Year•2017Country of Activity•KoreaDirect Recipient Country of Incorporation•KoreaSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Apr 19, 2017

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

Private Sector

  • Korean Air Lines Co., Ltd. (KAL)

Loan description

ICBC Leasing leases one Boeing 747-8 aircraft to Korean Air

Interest type•Unknown

Narrative

Full Description

Project narrative

On April 19, 2017, financial close was reached on a deal in which the Bank of China (BOC) entered into a loan agreement with Korean Air Lines Co., Ltd. (KAL) — the flag carrier airline of South Korea headquartered in Seoul and listed on the Korea Exchange — to fund a financial lease by ICBC Financial Leasing Co., Ltd. (ICBC Leasing) of one Boeing 747-8 aircraft for Korean Air. The BOC loan is captured by Record ID#108516. The ICBC Leasing is captured by Record ID#108516. The loan was secured by (i.e. collateralized against) the Boeing 747-8 aircraft in question. The proceeds were to be used to the borrower to support the acquisition of the aircraft for the finance lease from ICBC Leasing.

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.