SyCipLaw advises China Banking Corporation and BDO Unibank, Inc. on financing the re-fleeting of Philippine Airlines, Inc.

Sept 24, 2014

SyCipLaw acted as Philippine counsel to China Banking Corporation and BDO Unibank, Inc. to finance the acquisition of A321 and A330 aircraft of Philippine Airlines, Inc. (PAL), the national flag carrier. The financing transaction involves a structure imposed by PAL: a finance lease between the owner of the aircraft (a special purpose Cayman entity) and another intermediate special purpose Cayman entity (the finance lessee), and an operating lease between the Finance Lessee and PAL.

While aircraft financing may be "bread-and-butter" for banks in other jurisdictions, for ChinaBank and BDO to take the lead in these loans to PAL is a milestone for Philippine banking. This is also one of the first transactions in the Philippines where a commercial airline acquired an aircraft indirectly through an affiliated special purpose company that was established outside of the Philippines.

The SyCipLaw team was composed of partner Mia G. Gentugaya and associates Bhong Paulo A. Macasaet and Ma. Luisa D. Manalaysay.