The Hindu Business Line : AI secures $1.3-b US Exim loan

The US Exim bank has cleared a loan of $1.3 billion for Air India (AI) to purchase 17 aircraft and engines that the airline and its subsidiary are to receive up to December next year.

The financing is the largest transaction in Indian aviation supported by the US Exim. Air India Express is expected to get the first aircraft, a Boeing 737-800, through this deal next month.

In a statement the airline has said that the US Exim has also provided a preliminary loan commitment of $ 4.9 billion for the remaining 51 aircraft that the airline would receive between January 2008 and February 2012. The financing is the largest transaction in Indian aviation supported by the US Exim.

In December last year, Air India had entered into an agreement with Boeing for acquiring 68 aircraft including 18 for its subsidiary, Air India Charters Ltd. The US Exim would guarantee loans up to 85 per cent of the aircraft cost, while the remaining cost would be funded through commercial borrowings. The balance of fund requirement would be funded by Indian commercial banks including the State Bank of India and ICICI Bank.

The Exim loan would be amortised over 12 years, while commercial loans would be for a period of five years starting from the date of withdrawal of the loans.

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