WestJet details $77m 737-800 Ex-Im financings

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

WestJet released financing details of the two Boeing 737-800s deliveries scheduled for February and June 2012.

The carrier mandated a Canadian bank to arrange an Export-Import Bank of the United States guaranteed facility with a 12-year term.

Earlier this month, the Ex-Im Bank authorised a final commitment of $77.6 million to support the financing of the two 737-800s. The final commitment amount provides for an exposure fee of 4% on the financed portion of the aircraft price to be included under the guarantee. "We will be charged a commitment fee of 0.2% per annum on the non-cancelled and non-disbursed portion of the final commitment, and in accordance with the 2011 Aircraft Sector Understanding, the commitment fee shall accrue as of 31 January 2011," said WestJet.

The facilities will be financed in Canadian dollars and amortized over a 12-year term, plus a floating rate of interest equal to the three-month Canadian dealer offer rate plus 75 basis points, according to the carrier.

To mitigate the impact of floating interest rates, WestJet entered into swap agreements with the same Canadian chartered bank to fix the interest rates over the 12-year term at rates of 2.89% and 2.99%, inclusive of the margin of 75 basis points, for the February and June 2012 deliveries, respectively.

WestJet currently operates 13 Boeing 737-600s, 69 737-700s and 15 737-800s. in addition to the two 737-800s scheduled for delivery in the first half, Westjet will add another 737-800 from Aviation Capital Group.