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Overview

Bank of China contributes to facility to Virgin Atlantic to finance JOLCO on Boeing 787-9

Commitment Year•2018Country of Activity•United KingdomDirect Recipient Country of Incorporation•United KingdomSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Feb 5, 2018

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 Commercial Banks

  • Bank of China (BOC)

Cofinancing agencies

Private Sector

  • DBS Bank Ltd.

State-owned Banks

  • Landesbank Hessen-Thüringen (Helaba)

Receiving agencies

Private Sector

  • Virgin Atlantic

Loan description

Bank of China contributes to facility to Virgin Atlantic to finance JOLCO on Boeing 787-9

Interest type•Unknown

Narrative

Full Description

Project narrative

On February 5, 2018, the Bank of China (BOC) contributed to a debt facility Virgin Atlantic to finance the company's closing of a Japanese operating lease with call option (JOLCO) on a 2016 Boeing 787-9 aircraft. BOC and DBS Bank acted as joint lead arrangers and provided day-one financing. Helaba joined the lending syndicate on the second day, splitting its debt share with DBS Bank. Further details concerning the debt facility are unknown. Virgin Atlantic acquired a total of two Boeing 787-9 aircraft in 2018. The aircraft reportedly generated a collective profit of GBP 23.2 million. The acquisitions increased the size of Virgin Atlantic's fleet to 17.

Staff comments

1. Virgin Atlantic defined a JOLCO in their 2018 operating report as: "Japanese Operating Lease with Call Option. A special purpose vehicle is established with a 100% ownership by a Japanese entity, some of the equity is provided by investors and the remainder comes from lenders (banks)." 2. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products. JOLCO agreements additionally allow the lessor to purchase the leased object (aircraft) for a set price at a certain time. This option is generally exercised.