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Overview

BOC Aviation enters into sale and leaseback agreements with Air Canada for two Boeing 777-300ER aircraft (Linked to Record ID#98738)

Commitments (Constant USD, 2023)$667,603,444
Commitment Year•2008Country of Activity•CanadaDirect Recipient Country of Incorporation•CanadaOverseas Jurisdiction•SingaporeSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Mar 19, 2008
Last repayment (originally scheduled)
Mar 16, 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

Private Sector

  • Air Canada

Loan description

BOC Aviation enters into sale and leaseback agreements with Air Canada for two Boeing 777-300ER aircraft

Interest type•UnknownMaturity•12 years

Narrative

Full Description

Project narrative

On March 19, 2008, BOC Aviation, Bank of China's (BOC) wholly-owned aircraft leasing subsidiary, entered into a purchase and leaseback agreement with Air Canada, Canada's largest air service provider, for two Boeing 777-300ER aircraft (ID #98738). Then, on June 26, 2008, BOC Aviation entered into an identical agreement with Air Canada for a third Boeing 777-300ER aircraft (ID #98738). The aircraft were leased back to Air Canada for a period of twelve (12) years. The aircraft were delivered to Air Canada throughout the first half of 2008. Although the financial details of the agreements are currently unknown, Bloomberg reports the listed price of the aircraft at the time as a minimum of $237 million each. These agreements increased BOC Aviation's fleet size to 83 planes, and the amount of BOC Aviation's owned Boeing 777-300ER aircraft to 9.

Staff comments

1. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products. 2. Given that the listed unit price of a Boeing 777-300ER aircraft was at least $237 million at the time that the sale and leaseback agreement was signed, AidData assumes that the value of this sale and leaseback agreement was $474 million. This issue warrants further investigation.