Oman Air signs aircraft financing

10 February 2003
Flag carrier Oman Airsigned on 4 February an $80 million aircraft financing agreement with BankMuscat, Oman Arab Bankand Arab Bank. Under the terms of the deal the three lenders will act as lead arrangers for the loan, which is intended to fund the acquisition of two 737 next-generation jets from The Boeing Companyof the US (MEED 29:6:01).

The loan, which is to be staged in two phases, carries a tenor of 10.5 years. The first tranche of $40 million, which will be provided by the three arranging banks, will cover the delivery of a 124-seat 737-700 that has recently come into service. The second $40 million tranche will be drawn down if Oman Air decides to go ahead with the delivery in the second half of the year of a 166-seat 737-800. Syndication of the facility is required if the second tranche were to be drawn down.

The aircraft were ordered in February 2001 in what remains the airline's biggest-ever aircraft deal. The deal involved the combined lease and purchase of five next-generation 737s from Boeing for delivery between 2002/04, with an option to buy a further two aircraft (MEED 16:2:01, Transport).

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