-World’s First Aircraft Finance Scheme with Insurance Features-
Development Bank of Japan Inc. (DBJ, Masanori Yanagi; President & CEO), in cooperation with Sumitomo Mitsui Banking Corporation (SMBC; Makoto Takashima, President and Chief Executive Officer), has concluded a loan agreement with Seoul-based Korean Airlines for the purchase of new aircraft. The loan makes use of the Aircraft Finance Insurance Consortium (AFIC), an insurance framework managed by Marsh, a global leader in insurance broking and risk management.
AFIC was created in recognition of the opportunity to facilitate financing for new Boeing aircraft to address rising global aviation demand. AFIC includes four insurance companies -- Allianz, AXIS Capital, Sompo International (formerly Endurance), and Fidelis, who provide insurance against non-payment of the principal and interest on loans provided to airlines and leasing companies for the purchase of aircraft.
Wishing to use its innovative financial products in support of a sustainable aircraft finance market, DBJ worked with SMBC in extending the loan, the first in the world to use the AFIC’s insurance support for the purchase of aircraft. Korean Airlines will use the funds to buy Boeing 787-9 airplanes.
Also, DBJ and Boeing Capital Corporation entered into a Memorandum of Understanding in 2015 to mutually work together on key aircraft financing opportunities for new Boeing airplanes and projects of priority support from DBJ. This led to the recent AFIC-funded deal.