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Overview

Bank of Communications Financial Leasing enters into a jet engine leasing deal worth approximately €64 million EUR with Korean Air for four jet engines

Commitments (Constant USD, 2023)$77,203,939
Commitment Year•2016Country 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
Sep 1, 2016
Last repayment (originally scheduled)
Aug 31, 2022

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

  • China Bank of Communications Financial Leasing Co., Ltd. (BoCom Leasing)

Receiving agencies

Private Sector

  • Korean Air Lines Co., Ltd. (KAL)

Loan description

Bank of Communications Financial Leasing enters into a jet engine leasing deal worth approximately €64 million EUR with Korean Air for four jet engines

Interest type•UnknownMaturity•6 years

Narrative

Full Description

Project narrative

Prior to September 2016, Bank of Communications Financial Leasing Co., Ltd. (BoCom Leasing) — a Chinese state-owned leasing company — entered into a jet engine leasing deal worth approximately €64 million EUR with Korean Air Lines Co., Ltd. (KAL) — the flag carrier airline of South Korea headquartered in Seoul and listed on the Korea Exchange — for four jet engines. The lease had a term of six years. This was the first euro-denominated lease financing from a China-based financier.

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.