Arab Banking Corporation closes aircraft financing deal

ABC has provided acquisition finance for a special-purpose company established for this transaction, to purchase three Airbus A320-111 aircraft. These three aircraft have been deployed on lease to British Airways.

Investors behind the special-purpose company consider the aircraft to be attractively priced under current market conditions, and have developed an investment vehicle to exploit such an investment opportunity. ABC provided credit facilities to enable these investors to leverage their equity investment and enhance their potential return on investment.

The facility is structured to have an appropriate debt-to-equity balance. Cash flows from the operating lease to British Airways will enable the facility to amortise down to a small balloon amount, ensuring strong debt coverage throughout the facility tenor. The combination of asset-value coverage and secure cash flow strengthens the effective credit structure.

This financing is the latest of several specialised asset-backed financing transactions which ABC has been involved with around the world. ABC established a dedicated Global Project & Structured Finance unit just over two years ago and the bank has successfully positioned itself as a leader in this field in the Middle East region.

ABC offers the full spectrum of project and structured finance services for clients, including financial advisory, debt structuring, underwriting, arranging and syndication.

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