Narrative
Full Description
Project narrative
In or around June 2014, China Construction Bank Corporation (CCB) entered into a sale-and-leaseback agreement valued at £110 million GBP ($187 million USD) with Belgian bank KBC Bank N.V. for 111 Old Broad Street. CCB purchased the property and leased part of it back to KBC Bank, with other space set to be CCB's European headquarters. 111 Old Broad Street is an office building located in London and consisted of 123,000 square feet over eight floors.
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. 2. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products.