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Overview

Bocomm Aviation Leasing Ireland enters into a sale-and-leaseback agreement worth $204 million USD with flydubai for four Boeing 737 MAX 8 aircraft

Commitments (Constant USD, 2023)$196,543,179
Commitment Year•2022Country of Activity•United Arab EmiratesDirect Recipient Country of Incorporation•United Arab EmiratesOverseas Jurisdiction•IrelandSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Dec 10, 2022
Start (actual)
Dec 14, 2022
End (actual)
Mar 1, 2023

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

  • Bocomm Aviation Leasing Ireland Company Limited

Receiving agencies

State-owned companies

  • Dubai Aviation Corporation (flydubai)

Collateral providers

State-owned companies

  • Dubai Aviation Corporation (flydubai)

Loan description

Bocomm Aviation Leasing Ireland enters into a sale-and-leaseback agreement worth $204 million USD with flydubai for four Boeing 737 MAX 8 aircraft

Interest type•Unknown

Collateral

The sale-and-leaseback agreement was secured by the four Boeing 737 MAX 8 aircraft.

Narrative

Full Description

Project narrative

On December 10, 2022, Bocomm Aviation Leasing Ireland Company Limited — the Ireland-incorporated subsidiary of Bank of Communications Financial Leasing Co., Ltd. (BoCom Leasing), a Chinese state-owned leasing company — received a finance mandate for a forward sale-and-leaseback agreement worth an estimated $204 million USD with Dubai Aviation Corporation — a Dubai-incorporated low-cost airline owned by the Investment Corporation of Dubai that does business as flydubai — for four Boeing 737 MAX8 aircraft. 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. Financial close was achieved on March 1, 2023. The first aircraft was delivered on or around December 14, 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. 2. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products. 3. $204 million USD was assessed by industry media sources to be the value of this sale-and-leaseback agreement. 4. In aviation finance, financial close typically occurs on or around the delivery date of the final aircraft. As financial close occurred on March 1, 2023, AidData has estimated the aircraft was delivered on or around that date. Thus AidData has coded the actual_implementation_completion_date fields as March 1, 2023 and marked the actual_implementation_completion_date_estimated? fields as True.