Vietnam Airlines signs loan to fund Airbus planes
HANOI - Vietnam Airlines and France's Calyon, leading a group of banks, signed an agreement on Thursday for a loan to help the national carrier fund the purchase of 10 Airbus narrow-body A321 aircraft.
Calyon said it was awarded the lead arranger mandate in August 2005 to set up a $576 million loan.
The 12-year dollar loan will come in two tranches, and repayment will be guaranteed by Vietnam's Finance Ministry, Alain Chrun, managing director of Calyon's Structured Finance Department, told a news conference.
He declined to give the value or the interest rate but said the rate was based on six-month LIBOR.
Calyon, the investment banking arm of France's top retail bank Credit Agricole , and Vietnam Airlines both said the aircraft purchase exceeds $800 million at list price. Airbus said in late 2004 that the list price of the package was about $750 million.
Calyon acts as the sole arranger, agent and also the underwriter of the loan, which also comes from Japan's Bank of Tokyo-Mitsubishi UFJ, Germany's HSH Nordbank [HSH.UL], Norddeutsche Landesbank Girozentrale and AB Svensk Exportkredit.
The first tranche covering 85 percent of the loan is sourced from lenders in France, the UK and Germany. The Japanese bank is among those to lend under the second tranche of 15 percent, Chrun said.
He said the loan, backed by the 10 aircraft as collateral, had been reached following Vietnam Airlines' sound performance.
The unlisted airline estimated revenues this year would exceed $1 billion for the first time, up from $922 million last year and $770 million in 2004.
Deliveries delayed
Vietnam Airlines signed a deal to buy the 10 Airbus aircraft in December 2004. The first aircraft should have been delivered in March 2006, but the airline failed to advise Airbus prior to March of its selection of engines and onboard equipment.
The first A321 plane will now arrive on Jan. 8, 2007, followed by five aircraft next year, three more in 2008 and the last in 2009, said Tran Thanh Hien, deputy head of the airline's finance and accounting department.
"This is a huge project that needs government approval, so the deliveries will be later than first planned," he told the news conference.
Hien said the airline would use export credit to fund the aircraft purchase while it also considered issuing corporate bonds at home and abroad to raise funds for building infrastructure.
"We are interested in fund-raising channels in the international markets and domestic markets," Hien said, without giving a timeframe or size for the bonds.
The airline operates 10 Boeing 777-200 ERs, one Airbus A330-300, six Airbus A321s, 10 Airbus A320s, nine ATR-72s and two Fokker-70 aircraft.
Last month, Vietnam Airlines said its 38-strong fleet would be expanded with four Boeing 787-8s, 10 A321s and five ATR-72s between 2007 and 2010.
Reuters - December 14, 2006.
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