Saudi-based, PIF-owned aircraft leasing company AviLease secured a USD 1.5 bn unsecured revolving credit facility from a global syndicate of 20 banks, according to a statement released on Friday. 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, according to the statement.

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 — worth an estimated USD 35-45 bn — are required to cover the Saudi aviation market demand over the next five years, 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? The international consortium includes major regional players, such as Al Ahli Bank of Kuwait, Abu Dhabi Commercial Bank, Emirates NBD, and First Abu Dhabi Bank. Other notable global financial institutions include BNP Paribas, Bank of China, Crédit Agricole CIB, Citi, HSBC, JP Morgan, Mizuho, Morgan Stanley, Mitsubishi UFJ Financial Group, and Standard Chartered.

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, purchases of 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 UPDATES-

#1- Indian conglomerate Adani’s airport unit is in discussions with First Abu Dhabi Bank, among other international lenders, to secure a USD 750 mn loan, Bloomberg reported last week, citing sources familiar with the matter. The unit aims to finalize the debt raise by May, with the tenor likely to be less than five years. Adani is also in talks with other international lenders, including Barclays and Standard Chartered. The funds will support capital expenditure and the refinancing of upcoming debt maturities.

REMEMBER- Earlier this month, Adani Group raised USD 750 mn through an offshore private placement bond, backed by several investors including BlackRock. The proceeds are being used to advance the expansion strategy of its Dubai-based unit, Renew Exim, which recently acquired an additional 20.8% stake in Indian engineering and construction firm ITD Cementation, raising its total ownership to 67.5%.

#2- Arab Energy Fund backs China’s UEG: Hong Kong-listed energy production and trading firm United Energy Group (UEG) secured a USD 100 mn private loan from Riyadh-based investment firm Arab Energy Fund, formerly known as Apicorp, to shore up its financial reserves, Bloomberg reported last week, citing a source it said was familiar with the matter.

To settle an old bill: The five-year facility will be used to refinance the company’s outstanding debt, with part of the proceeds earmarked for UEG’s upstream operations in Iraq. The firm is also looking to raise an additional USD 200 mn for similar uses.

Why it matters: The funding gives UEG more breathing room as oil prices come under pressure, with OPEC+ recently announcing a surprise supply hike for May. The loan also underscores deepening capital links between GCC investors and China’s energy sector, especially in Iraq and Egypt — two geographies where UEG has been actively growing its footprint.

ICYMI- The Arab Energy Fund recently issued a USD 650 mn 5-year senior unsecured bond under its Global Medium-Term Note Program, booking USD 935 mn in orders. The offering was 1.4x oversubscribed.

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