JPMorgan to refinance AI’s $1.1-billion bridge loan

Mumbai: The protective shield of state ownership and guarantees from the US Exim Bank have helped Air India, the loss-making flag carrier, refinance a $1.1-billion bridge loan that it had taken to fund the purchase of 10 Boeing aircraft even as private Indian carriers struggle to attract investors.
Long-term debt arranged by JPMorgan Chase will fund the purchase of seven Boeing777s, the wide body aircraft deployed by Air India on long haul routes, three 737-800s for Air India Express, the low-cost service of Air India, and a spare engine. The debt, which replaces a bridge loan from Standard Chartered, was finalised on January 28 in Washington.
Piyush Agarwal, executive director-corporate banking at JPMorgan Chase, confirmed the transaction. “We are the sole underwriters of the deal; the entire exposure is on our books. It is a well-structured transaction and our risks are adequately covered as it is a large, long-tenor loan,” Mr Agarwal told ET.
An official of the National Aviation Company of India, or Nacil, the company formed by the merger of Air India and the erstwhile Indian Airlines, claimed that the deal would help save $30 million in interest costs per year, though he declined to provide any details.
15/02/10 Manisha Singhal/Economic Times

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Categories: Foreign Feb 2010, NACIL Feb 2010