MUFG, Cebu Pacific close $123 million financing deal

MANILA, Philippines — Tokyo-based MUFG Bank Ltd. (MUFG) has closed a 12-year, $123 million Japanese operating lease, with call option (JOLCO) financing, with Gokongwei-owned low cost carrier Cebu Pacific.

Diana Singson, managing director and head of Global Corporate & Investment Banking for Philippines at MUFG, said the bank has a long-running multi-product relationship with Cebu Pacific and its parent JG Summit Holdings Inc.

Singson said the largest bank in Japan is honored to support and further deepen its partnership with Cebu Pacific through this JOLCO financing.

“Having been in the Philippines for close to 70 years, this transaction showcases MUFG’s capabilities and deep understanding of our Philippine-based clients and supports them as they expand in the region,” Singson said.

MUFG acted as the mandated lead arranger, sourcing and arranging both debt and equity portions in this JOLCO transaction. It also served as the account bank, facility agent, security agent, as well as the main lender in the financing.

The transaction is secured by two new Airbus A321NX aircraft, a modern new-generation aircraft type core to Cebu Pacific’s fleet.

This transaction marks the first time that Cebu Pacific has returned to the financing market via a JOLCO structure since the COVID-19 pandemic.

It also reaffirms MUFG’s ability to leverage its global banking network to structure tailored solutions to support its clients.

MUFG’s managing director and head of aviation finance for Asia Pacific June Raj said the JOLCO market continues to be an attractive financing option for selected clients across the region.

“This latest JOLCO transaction once again demonstrates MUFG’s commitment and specialized capabilities in supporting our aviation clients through the ebb and flow of market cycles. Cebu Pacific is an important client for MUFG and we look forward to further collaboration with them as they continue to grow from strength to strength,” Raj said.

Aviation finance is a crucial growth pillar for MUFG. The bank’s Global Aviation Finance Office (GAFO) leads and manages its aviation portfolio and coverage of aviation clients on a worldwide basis as part of MUFG’s broader global corporate banking business.

GAFO has played an instrumental role in building resilience in MUFG’s aviation portfolio via key hubs in London, New York, Hong Kong, Singapore, and Tokyo amid the COVID-19 pandemic.

It has also successfully delivered many new transactions across a range of aviation products.

Cebu Pacific is the Philippines’ leading low-fare airline and currently flies to 35 domestic and 24 international destinations across Asia, Australia and the Middle East.

Show comments