Standard Chartered Bank and Bank of India give $215-mn term loan to Air India subsidiary

Standard Chartered and Bank of India announce aircraft financing of $215-mn term loan to subsidiary of Air India

Standard Chartered and Bank of India on October 15 announced the financing of USD 215 million term loan to AI Fleet Services IFSC Limited (AIFS), a leasing subsidiary of Air India, based in the Gujarat International Finance Tec-City (GIFT City). AIFS has entered into a 7-year amortising term loan facility for financing of six Boeing 777-300 ER aircraft, it will lease the aircraft to Air India.

This landmark transaction is the first commercial aircraft finance transaction to be structured with a GIFT City borrower, positioning GIFT City as an emerging aviation finance centre, said the banks in a joint statement.

Sanjay Sharma, Chairman, AIFS & Chief Financial Officer, Air India said: “Air India has embarked on a five-year transformation journey, placing an order for 570 aircraft, and GIFT City will be important for financing of these aircraft. With this commercial aircraft finance transaction via Standard Chartered and Bank of India we are glad to see GIFT City maturing further and emerging as an aircraft leasing and financing option for airlines as Indian aviation takes strides.”

Abhishek Pandey, Global Head of Transportation Finance at Standard Chartered, said: “This milestone demonstrates our ability to structure innovative, jurisdiction-aligned solutions while mobilising new pools of capital. This financing highlights our long-standing expertise in aviation finance and our commitment to supporting India’s aviation sector as it continues its remarkable growth trajectory.”

PD Singh, CEO, India and South Asia at Standard Chartered, said: “The first ever commercial aviation financing at GIFT City is an historic milestone and further reinforces GIFT city as an aviation finance hub of global repute. Standard Chartered is privileged to have led the transaction, in partnership with Bank of India. We believe the term loan facility to AI fleet services (AIFS), a subsidiary of Air India will provide a fillip to growing the aviation finance segment in India. It also underscores the Bank’s client centric approach and the endeavour to be an equal partner in the clients’ growth journey."

"Standard Chartered was the first foreign bank to establish a branch in GIFT City and this transaction reaffirms our commitment to advancing GIFT city as a premier international financial hub. It is a matter of pride for Standard Chartered to have recently partnered with CCIL and IFSCA in bringing its global experience and expertise in managing the dollar payments as well as providing settlement services at GIFT IFSC,” Singh added.

Ashutosh Sharma, CGM – International Financial Services Centres Authority, GIFT City (IFSCA) said, "GIFT IFSC is developing strongly as a globally competitive ecosystem for financial services, including aircraft leasing and financing. The successful closure of this aircraft financing deal, originated within GIFT IFSC and executed among Bank of India (IBU GIFT City branch), Standard Chartered Bank, and AI Fleet Services IFSC Limited for wide-body commercial aircraft, marks a significant milestone. This transaction not only paves the way for future commercial aircraft financing through the GIFT City framework but also underscores GIFT IFSC’s emerging role as agrowing hub for aviation financing and a destination offering competitive foreign currency loan structures."

Bank of India said: “At Bank of India, we are proud to be part of this landmark aviation financing transaction through GIFT City, Gujarat. This initiative underscores GIFT City’s growing significance as a global hub for aircraft financing. Aviation finance is a key enabler for India’s economic growth, connecting people, businesses, and markets worldwide. By leveraging the opportunities at GIFT City, Bank of India reaffirms its commitment to strengthening India’s presence in international financial services and contributing to the nation’s vision of becoming a leader in global aviation finance.”