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Overview

Bank of China contributes to a $500 million AUD syndicated loan to Qantas Airways for liquidity purposes amidst the COVID-19 pandemic

Commitment Year•2020Country of Activity•AustraliaDirect Recipient Country of Incorporation•AustraliaSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Mar 27, 2020
Last repayment (originally scheduled)
Mar 25, 2030

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

  • Bank of China (BOC)

Cofinancing agencies

Private Sector

  • Australia and New Zealand Banking Group (ANZ)
  • Commonwealth Bank of Australia (CBA) (CommBank)
  • National Australia Bank Limited (NAB)
  • Westpac Banking Corporation

Receiving agencies

Private Sector

  • Qantas Airways Limited

Collateral providers

Private Sector

  • Qantas Airways Limited

Loan description

Bank of China contributions to $500 million AUD syndicated loan to Qantas Airways for liquidity purposes amidst the COVID-19 pandemic

Interest rate (t₀)•2.75%Interest type•Fixed Interest RateMaturity•10 years

Collateral

This loan was secured by three unencumbered Boeing 787-9s wholly owned by Qantas Airways Limited.

Narrative

Full Description

Project narrative

In late March 2020, a syndicate of banks — including the Bank of China (BOC) — entered into a $500 million AUD secured club loan agreement with Qantas Airways Limited, Australia's flag carrier airline. This club loan carried a tenor (maturity period) of 10 years. This loan was secured by (i.e. collateralized against) three unencumbered Boeing 787-9s wholly owned by Qantas Airways. This loan was intended to provide Qantas with enough liquidity to ensure its survival during the COVID-19 pandemic, which had severely harmed airlines globally. BOC served as a mandated lead arranger for the $500 million AUD loan, alongside Australia and New Zealand Banking Group (ANZ), Commonwealth Bank of Australia (CBA), National Australia Bank Limited (NAB), and Westpac Banking Corporation. This loan was part of a $1.05 billion AUD ($625 million USD) multi-tranche secured facility, which included another 10-year bilateral loan tranche secured by one aircraft and solely arranged by Sumitomo Mitsui Banking Corporation (SMBC) and a $400 million AUD 7.5-year secured bond secured by three 787-9s; the liquidity raised under the facility was issued at all-in interest rate of 2.75%.

Staff comments

1. AidData has coded March 27, 2020 as the commitment date and marked the commitment_field_estimated? field as True because "Exclusive: Local banks lead Qantas multi-tranche loan", released on April 3, 2020, states that the loan was "announced last week", with March 27 being a week prior to April 3. 2. The number of lenders to the $500 million AUD secured loan, besides BOC and the four Australian banks that served as mandated lead arrangers, is unknown.