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ICBC Leasing pledges to provide $1 billion USD in financing facilities to AirAsia for the acquisition of Airbus A320 aircraft

$1M USD

Funder	ICBC Financial Leasing Co., Ltd. (ICBCFL) (ICBC Leasing)
Recipient Organization	Capital A Berhad (AirAsia) (Formerly AirAsia Group Berhad)
Country	Malaysia
Start Date	Oct 11, 2013
End Date	May 01, 2030
Duration	6,046 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`96681`

Grant Description

ICBC Leasing pledges to provide $1 billion USD in financing facilities to AirAsia for the acquisition of Airbus A320 aircraft On October 11, 2013, under the witness of Chinese President Xi Jinping and Prime Minister of Malaysia Datuk Seri Najib Tun Razak, ICBC Financial Leasing Co.

Ltd (ICBC Leasing) signed a Memorandum of Agreement (MOA) for aircraft financing facilities worth $1 billion USD (RM3.18 billion MYR) with AirAsia, a Malaysian low-cost airline, in which ICBC Leasing or ICBC overseas subsidiaries would provide AirAsia with financial facilities to acquire Airbus A320 aircraft in the form of finance leases, commercial loans, or sale-and-leaseback agreements.

The aircraft, numbering no fewer than 10, would be A320s assembled by Airbus (Tianjin) Final Assembly Co., Ltd.

📋 Staff Comments

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.
Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products.

📚 Sources & References

AirAsia and ICBC sign Memorandum of Agreement for aircraft financing facilities worth
AirAsia signs MOA for US$1b aircraft financing facilities Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.