KEB Hana Bank arranges $300 mn aircraft portfolio finance for Avolon

  • 2017-09-19

KEB Hana Bank, a leading South Korean lender, has arranged $300 million lease financing for an aircraft portfolio of Avolon, in the first financing arrangement by a South Korean bank for the Irish aircraft leasing firm, according to local newspaper reports.

The financing was raised to buy seven airplanes, including new Boeing 787-9 and Airbus A320, which would be leased to LATAM Airlines, a South American airline, and budget airlines in Southeast Asia, Yonhap News Agency reported on Sept. 14, citing KEB Hana Bank.

KEB Hana also provided $45 million in loans to participate in the financing, while pooling the remainder from unidentified financial services companies in other countries. No further details about the financing conditions were immediately available.

Since arranging $100 million financing for the Netherlands-based aircraft leasing company AerCap last year, the South Korean lender has been trying hard to secure a deal from Avolon.

“This is the first transaction between Avolon and a South Korean bank. We made every effort to clinch the deal by proposing attractive products and doing market research for about one year,” an unnamed KEB Hana Bank source told the Seoul Economic Daily.

Aircraft financing emerged as a new alternative asset class for South Korean institutional investors. But after five Arab nations cut ties with Qatar in June, South Korean brokerage houses are struggling to source aviation finance deals. Their previous deals were heavily weighted towards Qatar Airways and other airlines in the Middle East.

<Edited by Yeonhee Kim>