El Al seeks financing for three 787-9s and two spare engines

Eleanor Steed
By Eleanor Steed August 17, 2017 13:25

El Al seeks financing for three 787-9s and two spare engines

El Al, the Israeli national airline, is seeking financing for two spare Trent 1000 engines and long-term financing for three 787-9s. The request for proposals (RFP) for the two spare engines has been in the market for a few weeks and is reported to be receiving strong support. One engine is due for delivery by the end of 2017, with the other scheduled for delivery before the end of 2018.

The RFP for the three 787-9s will be issued in the coming days. For such an in- demand asset, El Al is seeking a long tenor at the lowest price with all financing options that keep the aircraft on the airline’s balance sheet for consideration, including Japanese Operating Leases with Call Options (JOLCOs), which would be a first for an Israeli company.

“We are open to consider any financial structure, including asset base finance, ECA supported finance, AFIC supported finance and even JOLCO or any other structure,” says Yancale Shahar, treasurer of El Al, “We have investigated the viability of Japanese operating leases many times before but there has always previously been little interest from Japanese equity investors for Israeli assets, mainly because they do not understand the country risk or the company. However, we believe that the 787 is such an in-demand and popular asset for investment that it will go a long way in reducing investors’ fears. But again, JOLCOs are just one financing option we are looking at, there are many other structures we would like to consider and we look forward to receiving offers from the market.”

The 787 is a very popular asset and together with a strong airline it be an interesting process to watch.

Eleanor Steed
By Eleanor Steed August 17, 2017 13:25