AviLease obtains USD 1.5 bn revolving financing facility from 20 global banks

AviLease secures USD 1.5 bn revolving loan from 20 global banks: PIF-owned aircraft leasing company AviLease secured a USD 1.5 bn unsecured revolving credit facility from a global syndicate of banks, it said in a post on LinkedIn. The three-year facility adds to AviLease’s existing USD 750 mn revolving credit facility, bringing its total available committed credit facilities to USD 2.25 bn, provided by 25 local and international banks from across the globe, the post added.

Where will the money go? The fresh funding will provide liquidity to AviLease’s expansion plans, including investing in more modern and energy-efficient aircraft, CEO Ted O'Byrne said. The plan is part of a larger business strategy that saw the company obtain a USD 1.1 bn, five-year unsecured loan to expand its fleet back in June 2023.

Some 450 and 500 additional aircraft over the next five years are required to cover the Saudi aviation market demand — valued at an estimated USD 35-45 bn, Deputy CEO Tariq Al Ghaziri told Asharq Business earlier. This represents a potential growth avenue for the aircraft leasing company, as approximately USD 20 bn is anticipated to go towards the leasing sector, he added.

Who provided the funding? Al Ahli Bank of Kuwait, Abu Dhabi Commercial Bank, BNP Paribas, Bank of China, Crédit Agricole CIB, China Construction Bank (Asia), Citi, DBS Bank, Emirates NBD, First Abu Dhabi Bank, HSBC, ING, Intesa Sanpaolo, JP Morgan, Mizuho, Morgan Stanley, Mitsubishi UFJ Financial Group, Natixis Corporate & Investment Banking, OCBC, and Standard Chartered provided the latest revolving facility.

BACKGROUND- AviLease is looking to expand its fleet to 300 jets by 2030. The growth push should see the lessor’s cargo traffic double and increase its balance sheet to USD 20 bn from USD 8 bn by 2030 through M&A, buying individual planes, and placing large orders for aircraft, O’Byrne said back in August 2023. The firm also hopes to issue up to USD 2 bn in USD-denominated bonds annually as part of its strategy to help the Kingdom diversify away from oil and become a trade and logistics hub.

IN OTHER DEBT NEWS-

Saudi Binladin Group secures SAR 2 bn loan with Sab: Saudi Binladin Group, Binladin International Holding Group’s construction arm, lined up a SAR 2 bn loan with Saudi Awwal Bank (Sab) to fund King Fahd Sports City development in Riyadh and strengthen the group’s financial position, Asharq Al Awsat reported, citing a press release from the bank. No further details were disclosed.

BACKGROUND- The Finance Ministry has been mulling several measures to support the high-profile contractor and stabilize its financial position, including providing loans, helping reschedule payments owed to creditors, and boosting the government stake in the group. The news comes as the Kingdom gears up for a big construction push to build stadiums, infrastructure, and other projects for the 2034 FIFA World Cup and Riyadh Expo 2030.