Industrial & Commercial Bank of China Leasing (ICBC Leasing) is in the process of launching the first aircraft securitisation from a Chinese banking institution.
The wholly-owned subsidiary of ICBC has received approval from the China Securities Regulatory Commission to offer 1.63 billion yuan ($262 million) in asset-backed securities (ABS).
The transaction will be tied to the assets of aviation, rail and shipping projects with high credit ratings, says ICBC Leasing. It will be offered in two tranches including a 1.59 billion yuan first tranche and a 40 million yuan secondary tranche.
The company did not provide a time frame for the sale but says approval is required six months before launching the ABS transaction. ICBC Leasing will choose the issue according to market conditions, it adds.
"Asset securitization is expected to become an important channel of financial leasing industry to crack the predicament of the source of funds to strengthen the management of the leased asset liquidity," says ICBC Leasing.
According to Flightglobal's Ascend online database, ICBC Leasing's aviation portfolio includes 77 commercial aircraft. The company also has 136 aircraft on firm order: 68 Airbus A320s, 20 A320neo, three A321s and 45 Comac C919s.