Riyadh-based jet lessor AviLease obtains USD 1.1 bn five-year loan to expand fleet

PIF-owned aircraft lessor AviLease has signed an unsecured USD 1.1 bn five-year loan agreement to expand its fleet, it said in a statement.The jet lessor said the loan will be used for general corporate purposes, including the acquisition of additional aircrafts, Reutersreports. The loan is made up of an USD 850 mn tranche and a USD 250 mn shariah-compliant tranche, and was 3.3x oversubscribed.

Lenders: Citibank, Riyad Bank, First Abu Dhabi Bank, Gulf International Bank, and Saudi Awwal Bank served as lead arrangers. Banque Saudi Fransi, Saudi Investment Bank, Abu Dhabi Commercial Bank, and HSBC joined them on the conventional tranche. Dubai Islamic Bank, Alrajhi Bank, Bank AlJazira, and Saudi National Bank were involved in the shariah-compliant tranche.

Advisors: Citibank served as financial adviser to AviLease and Allen & Overy as counsel, while Clifford Chance advised the lenders.

The company is also looking at expanding its finance business:Bloomberg reported earlier this week that AviLease is in advanced negotiations to acquire Standard Chartered's aviation finance business, in an agreement potentially worth at least USD 3.75 bn.

How big is its fleet now? The lessor says it has bought or committed to buying 45 planes by the end of this year, with a USD 2.4 bn book value, according to Reuters. It plans to have acquired 300 aircraft by 2030.

About AviLease: The company, which is wholly owned by Saudi Arabia’s Public Investment Fund was launched in July 2022, one year after plans for a new airline, later dubbed Riyadh Air, were announced. Last week, the company purchased 13 aircrafts from leasing company Avolon to support its growth, according to The National. AviLease was established to help drive Saudi Arabia's Vision 2030, which aims to diversify the economy away from oil dependency through the development of new industries.