BNDES lends Republic up to $1b for E-175s

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The Brazilian development bank BNDES is providing up to $1 billion in financing to Republic Airlines for its order of 47 Embraer 175 jets.

The lender is financing up to 85% of the cost of each aircraft and will advance the funds to Indianapolis-based Republic per request at the time of each delivery, the regional carrier says in a stock exchange filing on 19 July.

The list price of the 47 E-175s is about $2 billion, according to Brazilian airframer Embraer. This equals about $42.5 million per aircraft.

Each advance will have a tenor of 11 years and nine months from the date of the advance, and carries a coupon over Libor.

Republic will fly the E-175s under a 12-year capacity purchase agreement for American. The first aircraft was delivered on 15 July and is slated to enter service on 1 August.