This structure has been successfully implemented by Turkish Airlines by placing the financing in Japanese Yen rather than placing the predominant currency in aircraft finance which is American Dollar.
The structure was arranged by BNP Paribas where tax leverage is achieved in this deal together with Ex-Im Bank Guarantee coverage, enabling Turkish Airlines to use the advantages of both export guarantee and tax leverage leading to a low cost of financing for the subject aircraft.
Turkish Airlines has been awarded as the runner up in the “Structured Finance Deal of the Year” category as well by Bonds & Loans for its three new A321-200 aircraft delivered between September and November 2015.
Turkish Airlines’ primary goal was to obtain a long-term and diversified cheap funding source. Accessing to the Japanese capital markets have added another source together with the banking market and contributed to diversify the geographic exposure.
Moreover, this transaction has also achieved an attractive 100 per cent LTV financing at low cost by combining with Japanese equity.
This deal is the first-ever JPY denominated EETC for aircraft financing in the world, which has established a brand new financing structure by integrating conventional EETC with JPY capital markets.
This fully worked-out structure put multiple aircrafts into multiple classes and provided liquidity support from a Japanese bank, which boosted the acquisition of higher rating than the obligor‘s credit.
The flag carrier has also been awarded as the finalist in the “Transport Finance Deal of the Year” category by Bonds & Loans at the awards ceremony held in İstanbul, for its new B777-300ER and eight B737-800 aircraft delivered between May and August 2016.
The total financing builds up to €430 million ($456.5 million) and the structure is a combination of an innovative, complex and one-of-a-kind U.S. Ex-Im Guaranteed format French Tax Lease with Bridge Loan.
Turkish Airlines senior vice president – Finance, Ayşegül Denli, received the awards on behalf of the carrier.
She said: “It’s very important and also valuable for us to win three awards for the financial models that we implemented in 2016, which was a very tough year on global scale.
Turkish Airlines exhibits leading performance in all areas of aviation, constantly working for continued success.
As a result of this ongoing effort, we have received a wide range of awards which provide a substantial encouragement and satisfaction to our team.
I want to thank both Bonds & Loans and our devoted team, which has put their hearts and souls into these projects.
”Turkish Airlines has had very innovative and first-of-a-kind financing models rewarded by Jane’s Transport Finance, Global Transport Finance, Bonds & Loans, and Airfinance Journal in respect of its financing models that have been put in practice in 2006, 2008, 2011, 2012, 2013, 2014, 2015 and 2016.
Turkish Airlines has crowned its success with 21 international aircraft finance awards in the past 10 years for raising $12 billion.”
