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The Export Credits Guarantee Department (ECGD) is supporting its first Airbus aircraft financing deal with Russia’s Aeroflot which will begin with the purchase of four A319 aircraft as part of a 18-strong order.

ECGD, the UK’s official export credit agency, is providing an export credit guarantee on a US$24mn (£18.5m) bank loan to Aeroflot which it will use to finance the contract worth about US$170mn (£114mn) under the initial four aircraft deal.

ECGD’s support for the contract will cover the parts of the aircraft manufactured in the UK, ie, the wings which are manufactured at Airbus UK’s Broughton facility in North Wales.

In total, Russia’s national airline is buying 13 aircraft, and will lease a further five aircraft from operating lessors.

Airbus comments: “It is very important for Airbus to anchor a substantial part of the A319 fleet within Aeroflot, not only via operating leases but also for part of the order by way of long-term export credit agency financing. ECGD played a key role in supporting Airbus in order to achieve this goal.”

Citigroup has provided the UK element of the bank loan. The remainder of the bank loan package is being financed by BNP Paribas, Citigroup and WestLB – supported by France’s Coface and Germany’s Euler Hermes.

Citigroup’s Selma Storm says: “The invaluable assistance provided by ECGD has played an important part in the successful conclusion of the sometimes complicated negotiations.”

The financing deal for these four Airbus aircraft uses normal asset-based financing techniques, with a leasing structure and security over the aircraft.