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Overview

Bank of China provides debt portion of JOLCO financing to Virgin Atlantic for A350-1000 aircraft

Commitment Year•2019Country of Activity•United KingdomDirect Recipient Country of Incorporation•United KingdomOverseas Jurisdiction•United KingdomSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Aug 1, 2019

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)

Receiving agencies

Private Sector

  • Virgin Atlantic

Loan description

Bank of China provides debt portion of JOLCO financing to Virgin Atlantic for A350-1000 aircraft

Interest type•Unknown

Narrative

Full Description

Project narrative

In August, 2019, the Bank of China (BOC), through its UK branch, provided the debt portion of a Japanese operating lease with call option (JOLCO) to Virgin Atlantic for the acquisition of the company's first A350-1000 in an order of twelve. The JOLCO was arranged by Financial Products Group (FPG). Other details about the loan are currently unknown.

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.