Iberia breaks covenant on A340-600 finance lease

Victoria
By Victoria March 1, 2013 11:33

Iberia breaks covenant on A340-600 finance lease

Buried in International Airlines Group’s annual report is the news that the group has informed its lenders that is has failed to meet one of the financial covenant on a finance lease for one A340-600, which has now technically become repayable on demand. Iberia has three A340-600s on finance leases.
The IAG annual report states: “The Group’s finance lease for one A340-600 is subject to financial covenants which are tested annually. The Group has informed its lenders that it had failed to meet one of the covenants for the year to December 31, 2012. As a result of this covenant breach, one finance lease has technically become repayable on demand and $85 million (€64 million) has been reclassified from noncurrent to current. On February 14, 2013 the Group obtained a waiver from the lessors.”
“The Group has received notice from the lessor that two of the eight lending institutions have waived the covenant breach. The remaining institutions have provided positive feedback and are expecting their risk committees to formally waive the breach. It is expected for the lessor to issue a formal waiver by March 15, 2013.”

Victoria
By Victoria March 1, 2013 11:33
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