Air India has issued a tender seeking for an interim bridging loan facility to finance the delivery of five Boeing 787-8s.

In the tender document, Air India is requesting up to $500 million in loans from banks or financial institutions. The request follows an earlier one which led it to secure a bridging financing facility for the first seven aircraft, which was delivered between September 2012 and June 2013.

The loan will cover payments for the five 787s, which will be delivered from July onwards. The airline is seeking terms of between six to 12 months and the loan will be repaid upon the conclusion of a sale and leaseback arrangement.

Air India will offer the aircraft as security, or an equivalent collateral security as an alternative.

The loan, India's flag carrier adds, should be a direct one, without the need to form a special purpose vehicle structure as this will require a title transfer. It will also not be covered by any guarantee from the Indian government.

Flightglobal's Ascend Online Fleets database shows that Air India will receive five 787s from July onwards - one each in July (MSN36286) and August (MSN36275), and three in October (MSN36274, MSN36280 and MSN36279).

Source: Air Transport Intelligence news