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Overview

BoComm Leasing leases two Boeing 737 MAX 8 and two 787-9 aircraft to Korean Air

Commitment Year•2022Country of Activity•KoreaDirect Recipient Country of Incorporation•KoreaSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2022
Start (actual)
Jul 27, 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

BoComm Leasing leases two Boeing 737 MAX 8 and two 787-9 aircraft to Korean Air

Interest type•Unknown

Narrative

Full Description

Project narrative

Circa 2022, Bank of Communications Financial Leasing Co., Ltd. (BoCom Leasing) — a Chinese state-owned leasing company and wholly-owned subsidiary of Bank of Communications — entered into a finance lease agreement with Korean Air Lines Co., Ltd. (KAL) — the flag carrier airline of South Korea headquartered in Seoul and listed on the Korea Exchange — supported by Korea Development Bank (KDB) and JY AVIATION for two two Boeing 737 MAX 8 and two 787-9 aircraft. The first aircraft, one Beoing 737 MAX 8, was delivered on July 27, 2022.}.

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.