Citi, DBS and HSBC provide syndicated loans to Vietnam Airlines

May 23, 2011 | 17:30

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Three banks of Citi, DBS and HSBC today joined together to provide a syndicated loan, to Vietnam Airlines for the purchase of eight Airbus A321-231S from Airbus.

The total financing package is valued at $457 million. Of these, HSBC and Citi arranged and financed an Export Credit Agency (ECA) facility of $400 million with the support of European Export Credit Agencies, fronted by EULER HERMES, the German export credit agency. HSBC and DBS financed the remaining commercial facility of $57 million.

The transaction is backedby the Vietnamese Sovereign Guarantee. Vietnam Airlines signed the contracts with Airbus in 2007 and 2009 to purchase in total of 26 Airbus A321-231s for delivery during the 2011-2014 period, as part of a plan to expand their fleet to 115 and 170 aircraft by 2015 and 2020, respectively.

The eight aircraft, due for delivery by the end of this year, will be used by Vietnam Airlines to improve its services and meeting the demand for domestic and international mid-to-long haul routes.

“This finance package will enable Vietnam Airlines to complete its fleet renewal and expansion plan, which aims to enhance our operating efficiency on all routes worldwide,” said Pham Ngoc Minh, President and CEO of Vietnam Airlines.

Among banks, Citi has had a long-standing and multi-faceted relationship with Vietnam Airlines, including as sole arranger for its first US Exim backed financing for Boeing aircraft in 2003.

“Following the successful financing arrangement in 2009 for the 6 ATR 500 series, we are pleased to continue to support Vietnam Airlines in their goal to expand and become a world-class airline,” said Sumit Dutta, chief executive officer of HSBC Vietnam.

By Van Anh

vir.com.vn

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