Qatar Airways Finances Four Boeing 777s

By: Gregory Polek

October 1, 2009
Aerospace Industry, Aircraft

Against a backdrop of ongoing financial insecurity in the global banking sector, Qatar Airways announced this week that it has secured two “innovative” financing deals worth a total of $700 million to buy four new Boeing 777s due for delivery over the next few months.

A $350 million finance lease involving a 777-300ER and a 777-200LR followed an agreement with five leading international banks. Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, Deutsche Bank AG, Standard Chartered Bank and Sumitomo Mitsui Banking Corporation Europe Limited struck the deal with a 12-year term.

Qatar expects the imminent delivery of one Boeing 777-300ER and delivery of a 777-200LR next month.

Following a “highly successful” $500 million aircraft-financing transaction arranged by the same group of banks for Qatar Airways last year, the group showed interest in working again with the airline on a follow-on transaction, said Qatar.

The structure ensures that the deal finances 100 percent of the purchase cost of the aircraft, achieving a loan-to-aircraft value profile that would meet the requirements of international aviation banks.

Standard Chartered Bank acted as facility agent and security trustee.

“In these difficult times for the banking sector, I am very pleased to see this group of experienced aviation banks regrouping to support Qatar Airways once again, said Qatar Airways CEO Akbar Al Baker. “This clearly demonstrates the finance community’s continued support for Qatar Airways as it forges ahead with robust growth at a time when the rest of the airline industry is consolidating.

Separately, Qatar struck another deal worth $350 million for which Calyon and Natixis Transport Finance acted as joint arrangers for the financing of another Boeing 777-300ER scheduled for delivery this month and a 777-200LR due for delivery in December.

The companies designed the transaction, involving a two-tranche finance lease for up to 12 years, to attract “key asset players,” as well as banks that relied on the creditworthiness of the airline. A pool of four banks–Calyon, Credit Suisse, Helaba, and Natixis Transport Finance–underwrote the financing.

“I am very pleased that not only is Qatar Airways continuing to attract financing from its long-term relationship banks, such as Calyon and Natixis Transport Finance, but also attracting support from new banks, such as Credit Suisse and Helaba,” said Al Baker.

Qatar Airways operates a fleet of 69 aircraft to 82 destinations across Europe, the Middle East, Africa, Far East, South Asia and North America from its Doha hub. It holds firm orders for 220 airplanes worth more than $40 billion.

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