Firm continues strong run of significant aviation and aircraft finance transactions in Asia
Milbank, Tweed, Hadley & McCloy LLP acted as counsel to the Shanghai-based Bank of Communications Financial Leasing Co., Ltd. (“BOCOM Financial Leasing”), one of the leading China-based aircraft lessors, on a US$300 million dual-tranched offering of fixed-rate installment notes backed by eight Airbus aircraft. This is a landmark deal for both BOCOM Financial Leasing and the Asian market because this is the first aircraft-backed capital markets offering for BOCOM Financial Leasing and only the second such capital markets offering for a Chinese lessor out of Asia.
Transportation and Space partner Paul Ng and Global Capital Markets partner Giles Kennedy led the deal team for the firm, supported by Transportation and Space partner Elihu Robertson from the New York office.
The notes were issued by Blu Zenith Designated Activity Company, an Ireland-based special purpose vehicle. BOCOM Financial Leasing provided credit support for the issuance of the notes.
The offering is secured by a portfolio of Airbus A320, A321, and A330 passenger aircraft leased to Asiana Airlines, Juneyao Airlines, EVA Air, SAS and Air Berlin.
HSBC and Standard Chartered acted as the joint global coordinators. CICC and Jefferies are also involved as joint bookrunners and joint lead managers while HSBC is the structuring bank. Deutsche Bank (Hong Kong Branch) is the principal paying agent, issuer distribution account bank, issuer expenses account bank and calculation agent. DB Trustees (Hong Kong) is security trustee and note trustee.
“Milbank is delighted to be part of this historic note issuance by BOCOM Financial Leasing. This is an important turning point for Chinese lessors. In recent years the capital markets overseas have had great appetite for investing in aviation assets and the favourable response to this issuance by market players within Asia confirms that this market trend has now moved Eastward. With few transactions of this nature in the market, it was a challenging transaction to complete. The successful completion of this deal demonstrates the high level of innovation and versatility that has seen Milbank’s Transportation and Space practice group continue to play an essential role in sophisticated aviation and aircraft finance deals across Asia,” said Mr. Ng.
In 2016, Milbank’s Transportation and Space Practice received the Innovation Award at the China Aviation Finance Awards for a €65 million jet-engine transaction involving Korean Air Lines.
Milbank’s Transportation and Space practice group, globally recognized for groundbreaking and cutting-edge transactions in transportation finance, is routinely singled out by publications such as Airfinance Journal for its pivotal advisory role. In addition to Messrs. Ng, Kennedy and Robertson, Milbank lawyers involved in the deal team included associates Nicholas Milburn, Audrey Wang, Conor Colasurdo, and Horine Ye.
