Narrative
Full Description
Project narrative
On October 31, 2014, financial close was reached on a deal in which ICBC Financial Leasing Co., Ltd. (ICBCFL; ICBC Leasing) — 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 Asiana Airlines, Inc. — a South Korea-incorporated airline headquartered in Seoul and listed on the Korea Exchange with Kumho Industrial Co., Ltd. as its largest shareholder (30.08% stake at the time of the lease) — for two Airbus A321 aircraft. The aircraft had aircraft serial numbers MSN 6299 and 6395 and would be on an operating lease. 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 often occurs on or around the delivery date of the final aircraft. As financial close occurred on October 31, 2014, the last aircraft was almost certainly delivered on or around that date. Thus AidData has coded the actual_implementation_completion_date fields as October 31, 2014 and marked the actual_implementation_completion_date_estimated? fields as True.