Narrative
Full Description
Project narrative
On November 2, 2017, BOC Aviation Limited — a Chinese state-owned aircraft leasing company and wholly-owned subsidiary of Bank of China (BOC) — entered into a sale-and-leaseback agreement worth $228 million USD with Qatar Airways Company Q.C.S.C. — the flag carrier airline of Qatar wholly owned by the Government of Qatar — for three Boeing 777-300ER aircraft. The use of the proceeds of the sale-and-leaseback were to be used by the borrower for general corporate purposes.
Staff comments
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. 3. $228 million USD was assessed by industry media sources to be the value of this sale-and-leaseback agreement. 4. In aviation finance, financial close typically occurs on or around the delivery date of the final aircraft. As financial close occurred on November 2, 2017, the last aircraft was almost certainly delivered on or around that date. Thus AidData has coded the actual_implementation_completion_date fields as that date and marked the actual_implementation_completion_date fields as True.