MUFG Bank Ltd. (MUFG) said Wednesday it closed a 12-year $123-million Japanese operating lease with call option (JOLCO) financing with Cebu Pacific (Cebu).
Cebu Pacific is the Philippines’ leading low-fare airline that flies to 35 domestic and 24 international destinations across Asia, Australia and the Middle East.
MUFG said it acted as the mandated lead arranger, sourcing and arranging both debt and equity portions in the JOLCO transaction. MUFG also served as the account bank, facility agent, security agent as well as the main lender in the financing.
The transaction is secured by two new Airbus A321NX aircraft, a modern new-generation aircraft type core to Cebu’s fleet.
The transaction marks the first time Cebu Pacific returned to the financing market via a JOLCO structure since the COVID-19 pandemic. It also reaffirms MUFG’s ability to leverage its global banking network to structure tailored solutions to support its clients.
June Raj, MUFG managing director and head of aviation finance in Asia Pacific, said “the JOLCO market continues to be an attractive financing option for selected clients across the region”.
“This latest JOLCO transaction once again demonstrates MUFG’s commitment and specialised capabilities in supporting our aviation clients through the ebb and flow of market cycles. Cebu Pacific is an important client for MUFG and we look forward to further collaboration with them as they continue to grow from strength to strength,” said Raj.
Diana Singson, MUFG managing director and head of global corporate and investment banking for the Philippines, said: “We have a long-running multi-product relationship with Cebu Pacific and its parent JG Summit, and are honored to support and further deepen our partnership with them through this JOLCO financing. Having been in the Philippines for close to 70 years, this transaction showcases MUFG’s capabilities and deep understanding of our Philippine-based clients and support them as they expand in the region.”
Aviation finance is a crucial growth pillar for MUFG. The bank’s Global Aviation Finance Office (GAFO) leads and manages its aviation portfolio and coverage of aviation clients on a worldwide basis, as part of MUFG’s broader global corporate banking business.
