Japan Bank for International Cooperation (JBIC) has signed a loan agreement worth US$270 million (JBIC portion) with aircraft leasing company Tokyo Century Corporation (Tokyo Century). The loan is provided under JBIC’s Growth Investment Facility and is co-financed by Mizuho Bank, MUFG Bank, Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, and the Norinchukin Bank, bringing the total co-financing amount to US$450 million. The loan provides part of the necessary funds for the US aircraft leasing business of Tokyo Century’s subsidiary Aviation Capital Group (ACG).
Newport Beach, California-based ACG said on September 25 that Tokyo Century borrowed the debt capital on behalf of ACG, and lent the proceeds to ACG via an intercompany loan. “We are deeply grateful for the support provided by JBIC and other financial institutions to the overseas business growth of Tokyo Century," comments Madhu Vijay, executive vice president and chief financial officer of ACG. "ACG has always been focused on ensuring a diversified access to financing. This loan is an important element that will allow ACG and Tokyo Century to continue to meet our mission and business plan in supporting our industry partners and customers.”
Tokyo Century completed its acquisition of the entire interest in ACG in December 2019, and like all aircraft lessors the company is dealing with the impact of Covid-19. Many airlines have negotiated to defer monthly lease payments, and there is little or no aftermarket for most aircraft coming to the end of their lease term.
JBIC says Tokyo Century will continue to focus on developing its aircraft-related business. As Japan’s policy-based financial institution, the bank will continue to support the overseas business expansion of Japanese companies by drawing on its various financial facilities and schemes for structuring projects and performing its risk-assuming function.
In June, ACG announced the closing of a US$600 million unsecured revolving line of credit with Tokyo Century. The facility has an initial term of three years and will automatically extend for additional one-year periods with mutual consent.
“Maintaining our strong investment grade rating profile is very important to both ACG and Tokyo Century. This multi-year US$600 million line of liquidity provides an additional layer of capital support which benefits the company and our investors,” Vijay said at the time.
Founded in 1989, ACG is one of the world’s premier full-service aircraft asset managers. As of March 31 2020 it has approximately 500 owned, managed and committed aircraft, which are leased to about 90 airlines in 45 countries.