Ethiopian Airlines, the largest and most profitable airline in Africa, has secured a UD$41.4 million seven-year junior loan facility from ING Capital LLC for the acquisition of two Boeing 777 freighter aircraft.
The senior debt is supported by Ex-Im Bank and was provided by another financial institution with ING as their co-arranger.
The junior lender benefits from a second priority interest in the security package which secures both the Ex-Im Bank and junior loan financing.
Ethiopian Airlines is utilizing the junior loan facility to finance a portion of the net purchase price of the aircraft which is not supported by Ex-Im Bank.
ING Capital was the sole arranger and lender of the junior loan financing and will also act as the agent throughout the term of the transaction.
The financing closed concurrently with the delivery of the first aircraft on October 31st.
The second aircraft is scheduled to arrive in Addis Ababa on November 21st, 2014.
Ethiopian Airlines successfully secured the junior loan financing based on the strong relationship and thorough understanding of the airline’s financing requirements on the part of ING Capital LLC.
Nega Mekonnen, chief financial officer of Ethiopian Airlines, said: “The financial support for our acquisition of the two B777 Freighter aircraft is critical to Ethiopian Airlines as we aim to sustain our position as the largest cargo operator in Africa.
“These aircraft will help us increase our capacity and service quality for the ever growing perishable cargo market.”
This year alone, Ethiopian has phased-in 14 additional aircraft, including five B787 Dreamliners, one B737-800 with Sky Interior, one B777-300 two B777 freighter and four Bombardier Q-400 aircraft.
Terina Golfinos, managing director, ING Capital Structured Export Finance team in New York, said: “We were delighted to have the opportunity to close this important financing for Ethiopian Airlines and contribute in some small measure to their ongoing success as the regional carrier of choice.
“ING has had a lending relationship with Ethiopian Airlines since 2007, and we are pleased to support them with the expansion of their cargo division, which is crucial for Ethiopia’s growing export sector.”