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Overview

ICBC Leasing enters into a sale-and-leaseback agreement with Asiana Airlines for one Airbus A321neo aircraft

Commitment Year•2019Country of Activity•KoreaDirect Recipient Country of Incorporation•KoreaOverseas Jurisdiction•Hong Kong (China)Sector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jul 31, 2019
Start (actual)
Aug 12, 2019
End (actual)
Aug 12, 2019

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

  • ICBC Aviation Leasing Company Limited

Receiving agencies

Private Sector

  • Asiana Airlines, Inc.

Collateral providers

Private Sector

  • Asiana Airlines, Inc.

Loan description

ICBC Leasing enters into a sale-and-leaseback agreement with Asiana Airlines for one Airbus A321neo aircraft

Interest type•Unknown

Collateral

The agreement was secured by the relevant the one Airbus A321neo aircraft

Narrative

Full Description

Project narrative

On July 31, 2019, financial close was reached on a deal in which ICBC Aviation Leasing Company Limited — a Hong Kong-incorporated aviation leasing company and wholly-owned subsidiary of ICBC Financial Leasing Co., Ltd. (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 worth 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 (30.77% stake at the time of the lease) — for one Airbus A321neo aircraft. The aircraft 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. The aircraft was delivered on August 12, 2019.

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.