Three awards presented to Turkish Airlines for its successful aircraft financing models

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Mega Cervantes

Turkish Airlines has been awarded as the runner up in the “Trade and Export Finance Deal” category by Bonds & Loans for its brand new B777-300ER aircraft delivered in September 2015. The total financing builds up to 16.8 billion Japanese Yen and the structure is a combination of an innovative, complex and unique U.S. Ex-Im Guaranteed French Tax Lease.

 

This structure has been successfully implemented by Turkish Airlines by placing the financing in Japanese Yen rather than placing the predominant currency in aircraft finance which is American Dollar. The structure was arranged by BNP Paribas where tax leverage is achieved in this deal together with Ex-Im Bank Guarantee coverage, enabling Turkish Airlines to use the advantages of both export guarantee and tax leverage leading to a low cost of financing for the subject aircraft.

 

Turkish Airlines has been awarded as the runner up in the “Structured Finance Deal of the Year” category as well by Bonds & Loans for its brand new 3 A321-200 aircraft delivered between September and November 2015. Turkish Airlines’ primary goal was to obtain a long-term and diversified cheap funding source. Accessing to the Japanese capital markets have added another source together with the banking market and contributed to diversify the geographic exposure. Moreover, this transaction has also achieved an attractive 100% LTV financing at low cost by combining with Japanese equity. This deal is the first-ever JPY denominated EETC for aircraft financing in the world, which has established a brand new financing structure by integrating conventional EETC with JPY capital markets. This fully worked-out structure put multiple aircrafts into multiple classes and provided liquidity support from a Japanese bank, which boosted the acquisition of higher rating than the obligor‘s credit.

 

Flag carrier has also been awarded as the finalist in the “Transport Finance Deal of the Year” category by Bonds & Loans at the awards ceremony held in İstanbul, for its brand new 1 B777-300ER and 8 B737-800 aircraft delivered between May and August 2016. The total financing builds up to 430 million Euros and the structure is a combination of an innovative, complex and one-of-a-kind U.S. Ex-Im Guaranteed format French Tax Lease with Bridge Loan. Tax leverage is achieved in this deal together with Ex-Im Bank Guarantee coverage, enabling Turkish Airlines to use the advantages of both export guarantee and tax leverage leading to a low cost of financing for the subject aircraft. Also, as US Ex-Im is not active at the moment, there are bridge loans embedded into the Ex-Im guaranteed structure for each aircraft, leading to the benefit of having lower costs of financing also until Ex-Im coverage is available.

 

Turkish Airlines’ SVP Finance, Ms. Ayşegül Denli received the awards on behalf of the carrier. In her acceptance speech she emphasized her great pride in winning the honor. She continued by saying "It is very important and also valuable for us to win 3 awards for the financial models that we implemented in 2016, which was a very tough year on a global scale. Turkish Airlines exhibits leading performance in all areas of aviation, constantly working for continued success. As a result of this ongoing effort, we have received a wide range of awards which provide a substantial encouragement and satisfaction to our team. I want to thank both Bonds & Loans and our devoted team, which have put their hearts and souls into these projects.”

 

Turkish Airlines has had very innovative and first-of-a-kind financing models rewarded by Jane's Transport Finance, Global Transport Finance, Bonds & Loans, and Airfinance Journal in respect of its financing models that have been put in practice in 2006, 2008, 2011, 2012, 2013, 2014, 2015 and 2016. Turkish Airlines has crowned its success with 21 international aircraft finance awards in the past 10 years for raising 12 billion US Dollars.

 

Previous Awards;

 

  • 2006 Jane’s Transport Finance, Aircraft Debt Deal of the Year (Middle East) 
  • 2008 Jane’s Transport Finance, Aircraft Leasing Deal of the Year (Europe) 
  • 2008 Airfinance Journal, Europe Deal of the Year
  • 2011 Jane’s Transport Finance, Aircraft Debt Deal of the Year (Europe) 
  • 2012 Airfinance Journal, Airline of the Year
  • 2013 Airfinance Journal, Tax Lease Deal of the Year
  • 2013 Global Transport Finance, Aircraft Leasing Deal of the Year (Europe) 
  • 2014 Bonds & Loans Awards, Structured Finance Deal of the Year (Turkey)
  • 2014 Airfinance Journal, Tax Lease Deal of the Year
  • 2014 Airfinance Journal, Engine Deal of the Year 
  • 2015 Global Transport Finance, EETC Deal of the Year (Europe) 
  • 2015 Bonds & Loans Awards, Trade&Export Finance Deal of the Year (Turkey)
  • 2015 Airfinance Journal Awards, Tax Lease Deal of the Year
  • 2015 Airfinance Journal Awards, Engine Deal of the Year
  • 2016 Airfinance Journal Awards, Capital Markets Deal of the Year
  • 2016 Airfinance Journal Awards, Tax Lease Deal of the Year
  • 2016 Airline Economics Aviation-100 Awards, European Deal of the Year
  • 2016 Airline Economics Aviation-100 Awards, Editor’s Deal of the Year


    Innovations;
  • The first ever JPY denominated EETC,  
  • The first ever ECA backed French Lease,
  • The first ever US Exim backed French Lease,
  • The first ever ECA backed JOLCO Lease,
  • The first ever US Exim backed JPY denominated Convertible Bond,
  • The first ever ECA Guaranteed Italian Tax Lease in Japanese Yen denomination.
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