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Overview

CDB Aviation Lease Finance leases one Airbus A321-200 aircraft to Asiana Airlines for sub-lease by Air Busan

Commitment Year•2017Country of Activity•KoreaDirect Recipient Country of Incorporation•KoreaOverseas Jurisdiction•IrelandSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Sep 4, 2017
End (actual)
Nov 17, 2017

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 companies

  • CDB Aviation Lease Finance DAC

Receiving agencies

Private Sector

  • Air Busan Co., Ltd.
  • Asiana Airlines, Inc.

Loan description

CDB Aviation Lease Finance leases one Airbus A321-200 aircraft to Asiana Airlines for sub-lease by Air Busan

Interest type•Unknown

Narrative

Full Description

Project narrative

On September 4, 2017, CDB Aviation Lease Finance DAC — the wholly-owned Ireland-based subsidiary of China Development Bank Financial Leasing Co., Limited (CDB Leasing) — received a finance mandate from 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 (33.47% stake at the time of the lease) — for one Airbus A321-200 aircraft. The aircraft would be an operating lease. Asiana Airlines then entered into a sub-lease agreement with Air Busan Co., Ltd. — a South Korean low-cost regional airliner based in the southern area of Korea with Asiana Airlines as its largest shareholder (approximately 48.93% stake at the time of the lease) — for the aircraft, which would be operated on Air Busan's network of services from its Busan Gimhae International Airport main base. Financial close was achieved on October 20, 2017. CDB Aviation delivered the aircraft on or around November 17, 2017.

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.