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Overview

BOC Aviation enters into sale-and-leaseback agreement with Icelandair Group for one Boeing 737 Max 8 aircraft

Commitment Year•2020Country of Activity•IcelandDirect Recipient Country of Incorporation•IcelandOverseas Jurisdiction•SingaporeSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2020
Start (planned)
Jun 30, 2021
End (planned)
Jun 30, 2021

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

  • Icelandair Group hf.

Loan description

BOC Aviation enters into sale-and-leaseback agreement with Icelandair Group for one Boeing 737 Max 8 aircraft

Interest type•Unknown

Narrative

Full Description

Project narrative

In 2020, BOC Aviation entered into a sale-and-leaseback agreement with Icelandic travel industry firm Icelandair Group hf. for one Boeing 737 Max 8 aircraft. The aircraft was due to arrive in the second quarter of 2021.

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.