After long negotiations the Export-Import Bank of the United States (Eximbank) has approved a $281 million long-term loan guarantee allowing the permanent financing of six Boeing 737-300s and five 737-500s delivered to Garuda Indonesia Airways.
Although ordered by Garuda several years ago, Boeing had stored the 737s for several months after completing them due to the Indonesian carrier's inability to arrange Eximbank financing for the aircraft. The US agency is concerned over Garuda's financial problems and Exim's ability to repossess the aircraft upon default. In total the 11 aircraft cost $346 million, the export credit agency says.
Boeing eventually delivered all 11 of the 737s to Garuda in November and December of last year, five of them recorded by the manufacturer as having been delivered on 29 December.
However, their delivery relied on someone providing temporary bridge financing. Boeing itself provided this in the form of short-term leases, but the problem of finding long-term financing for the aircraft remained.
Now, with Eximbank's agreement to guarantee a long-term loan for the bulk of the total purchase price of the 11 aircraft, the problem appears to have been solved.
In addition, says Eximbank, the government of Indonesia has agreed to sign a letter stating that if there is a default on the transaction, the Indonesian government will not hinder Eximbank's attempts to repossess the 737s - it will cooperate in the repossession.
Source: Flight Daily News
