PIA Islamic finance deal, United C-Series order? Air India SLB.

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By TESTCustomwebLP TESTCustomwebLP October 12, 2015 20:36

PIA Islamic finance deal, United C-Series order? Air India SLB.

Pakistan International Airlines has closed a $120 million receivable-backed Islamic Facility. This three-year monthly amortizing loan was structured using PIA seats as underlying assets and secured against assignment of IATA receivables from the UAE as well as for the first time PIA’s global credit card collections aggregated by WorldPay.

Citi and Mashreq bank acted as joint coordinators. Mandated Lead arrangers were:  Citi, Mashreq Bank, National Bank Bahrain, Noor Bank, United Bank Dubai and Warba Bank.  Citi also acted as account Bank for the transaction.

Earlier this year, Citi also assisted PIA to close an innovative $120mn dual-tranche 4 year loan supported by USEXIM bank and ICIEC (subsidiary of Islamic Development Bank) for maintenance of PIA’s 777s.

Meanwhile, Bombardier stated on Friday that it is in advanced discussions on a landmark order for the CSeries with a North American airline. This is a logical step. Bombardier’s C Series is a cracking aircraft with test stats that really do point to serious success. The aircraft program has been nigh on killed-off by delays and the Neo and Max rush that ran off of the back of its launch. There are quotes in the market that Bombardier is pitching various US majors, but both you and I know that at this point Bombardier will be pitching just about every airline that will take the time to listen. The question is: who is listening? The fact is that Bombardier requires top-tier airline orders and as such the deals on offer from the manufacturer are likely to be exceptional at this time and as such the US majors are listening. Maybe some of those lessors with cash to spend could do no better than go to the front door of Bombardier and get a deal without PDPs?

But then of course there is United Continental Holdings… United Airlines in on record that it is planning to order a fleet of 100-seat jetliners from either Bombardier or Embraer if it can agree on terms for a two-year contract extension with pilots in expedited bargaining, which is the top priority of the new CEO before his honeymoon period wears-off. A C-Series order would be a huge boost for United pilots, as well as for United Airlines and of course for Bombardier. Everyone would be a winner. Let us hope it happens.

Bombardier climbed 5.8% to C$1.65 in trading on Friday, the most among all Canadian industrials.

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By TESTCustomwebLP TESTCustomwebLP October 12, 2015 20:36