LCI closes innovative Islamic finance facility
LCI Helicopters has closed an innovative Islamic pre-delivery payment facility with Bank of London and the Middle East and Lloyds Bank. The facility will be used for Airbus H175s and H224es delivering over the next three years. LCI says it will be used to make pre-delivery payments on helicopters worth $250 million.
“Recently most PDP facilities have been paid by lessors through unsecured loans and we were really keen to re-connect the debt markets with true secured PDPs,” says Jaspal Jandu, CFO of LCI. “This is a true PDP where the banks are taking real asset risk.”
BLME was launched in London in 2006. Kuwait’s Boubyan Bank, an Islamic bank, is its main sponsor. The LCI deal relied on a master Murabaha facility with Lloyds also providing a conventional loan. Lloyds was mandated lead arranger for both facilities.
“As the dynamic helicopter leasing marketplace continues to expand rapidly, new sources and types of finance will be essential, and we’re delighted to be debuting this Islamic-structured arrangement with LCI,” said Simon Lefevre, Director – Leasing at BLME.
BLME also closed a $25 million pre-delivery facility for LCI in December that financed AgustaWestland pre-delivery payments.
“There are pockets of liquidity all over the world and our job is to find these”
“There are pockets of liquidity all over the world – whether it is Islamic money in the Middle East, pension funds in Australia or Asian savings – and our job is to find these pockets,” says Jandu.
“The banks looked hard at the assets,” says Jandu. “The H225e is a true evolution with range that will be needed as oil and gas fields move further out and there is a lot of interest in the Super Medium market.” LCI Helicopters is the launch customer for the H225e.
Jean-Michel Cerf, Head of Customer Financing at Airbus Helicopters, says: “LCI is a growing customer of Airbus Helicopters, and we’re delighted to be partnering with them on this innovative financing agreement.”
Patrick Sherrington, Head of Corporate Asset Finance at Lloyds Bank, says: “The helicopter leasing market is going from strength to strength and we are delighted to have met LCI’s requirements through this innovative solution.”
LCI Helicopters’ total has ordered more than 90 helicopters.