Overview

Bank of China provides senior commercial loan portion of financing package 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: Sep 30, 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)

Cofinancing agencies

Private Sector

Rand Merchant Bank (RMB)

Receiving agencies

Private Sector

Virgin Atlantic

Loan description

Bank of China provides senior commercial loan portion of financing package to Virgin Atlantic for A350-1000 aircraft

Interest type•Unknown

Narrative

Full Description

Project narrative

On September 30, 2019, the Bank of China (BOC), through its UK branch, provided the senior commercial loan portion of a financing package to Virgin Atlantic to finance the company's acquisition of the fourth A350-1000 aircraft in an order of twelve. Rand Merchant Bank (RMB) provided a subordinated debt loan. Further details about the loans are 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.