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Overview

Middle East Airlines enters into sale and leaseback agreement with BOC Aviation for 5-10 Airbus A321neo aircraft

Commitments (Constant USD, 2023)$267,800,773
Commitment Year•2019Country of Activity•LebanonDirect Recipient Country of Incorporation•LebanonOverseas Jurisdiction•SingaporeSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Sep 2, 2019
Start (actual)
Dec 1, 2020

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

  • BOC Aviation Limited

Receiving agencies

State-owned companies

  • Air Liban S.A.L.

Implementing agencies

State-owned companies

  • Air Liban S.A.L.

Loan description

Middle East Airlines enters into sale and leaseback agreement with BOC Aviation for 5-10 Airbus A321neo aircraft

Interest type•Unknown

Narrative

Full Description

Project narrative

On September 2, 2019, BOC Aviation announced that it had signed a sale and leaseback agreement with Middle East Airlines (MEA) — also known as Air Liban S.A.L. — for a minimum of five, and up to ten new Airbus A321neo aircraft. The value and borrowing terms of the sale and leaseback agreement are unknown. However, it is known that, at the time of the signing of the sale and leaseback agreement, the available list price of an individual A321neo aircraft was $129 million. The aircraft are powered by Pratt & Whitney’s PurePower engines. The aircraft were originally expected to be delivered in 2020 and 2021. On December 1, 2020, BOC Aviation announced that it had delivered the first two of five new Airbus A321NEO aircraft for lease to Middle East Airlines. In April 2021, all five airplanes were delivered.

Staff comments

1. Air Liban S.A.L., more commonly known as Middle East Airlines, is the flag carrier of Lebanon, with its head office in Beirut, near Beirut–Rafic Hariri International Airport. It is a wholly-owned subsidiary of Lebanon’s central bank (Banque du Liban). 2. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products. 3. Given that there is only evidence of two A321neo aircraft being delivered and the unit price of a A321neo aircraft was $129 million at the time that the sale and leaseback agreement was signed, AidData assumes that the value of the sale and leaseback agreement is $258 million for the time being. This issue warrants further investigation.