China Bank funds PAL’s A321 deal

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

Philippines' China Banking Corporation (China Bank) has returned to the marketplace with funding for local airline Philippine Airlines (PAL) after closing a $140 million debt facility for fellow carrier Cebu Pacific last month.

The bank is acting as the sole arranger of a $329 million financing facility for seven new A321 aircraft to be delivered this year.

The first two aircraft (MSNs 5715, 5747) closed earlier this month.

"China Bank is honoured to support PAL in its fleet renewal programme and the modernisation of the country's aviation sector," says China Bank's president and chief executive officer Peter Dee in a statement.

The transaction marks the second time the bank provides aircraft financing as sole arranger in 2013. China Bank was the sole arranger of the $140 million 10-year term loan to partially finance the acquisition of four new sharklet-equipped A320 for Cebu Pacific in January. China Bank Trust Group also acted as the security trustee for this transaction. The aircraft delivered between January and July this year.

PAL's new aircraft are financed through an " innovative" operating lease basis that illustrates PAL's ability to diversify its funding sources and effectively manage its capital requirements, says China Bank.

The carrier will deploy its new A321s on selected domestic and international routes.

The A321 joins the Airbus fleet at PAL that includes 22 A320 aircraft operating on domestic and regional routes with eight in service with affiliate carrier, PAL Express.

PAL also operates eight A330s on higher capacity routes across Asia and six A340-300s on its transpacific flights.