A London aviation finance team has completed the second DVB Airbus A320neo PDP financing. The team advised DVB Bank SE, London branch, on the second financing of pre-delivery payments (PDPs) due from Scandinavian Airlines (SAS) to Airbus in respect of five new A320neo aircraft being constructed under SAS' purchase agreement.
The PDP facility is structured as a revolving credit facility under which SAS may draw up to $46 million. The loans under the facility will be repaid upon delivery of each aircraft and the first delivery is due in September 2016. This transaction follows a previous PDP financing we handled for DVB relating to six Airbus A320neo, taking the total number financed to 11.
These complex and bespoke transactions are amongst the first PDP Financings in respect of A320neo aircraft, a new aircraft type due to enter service in 2016.
The structure involved the novation of SAS' purchase agreement (in respect of the relevant aircraft only) into a special purpose company administered by SAS which then entered into the facility agreement as borrower. DVB's security takes the form of a negotiated agreement with Airbus that, should the borrower default under the facility agreement, Airbus and DVB will enter into a new purchase agreement (in a pre-agreed form and for a specific price) in respect of any undelivered aircraft.
The team comprised of Richard Parsons, Guy Espitalier-Noel who took the lead associate role and Kirstin MacDougall.