El Al is exercising an option to change the financing for its new Boeing 737-900ER airliner from bank financing to a debt issue in the US.
El Al Israel Airlines Ltd. (TASE: ELAL) today announced that it is exercising an option to change the financing for its new Boeing 737-900ER airliner from bank financing to a debt issue in the US.
In August, El Al signed a $190 million loan agreement with a Canadian bank to finance the purchase of four Boeing 737-900ER airliner. The new planes will lower the age of El Al's fleet. El Al has authorized the Canadian bank to issue $94.3 million in bonds through a special purpose company, Rimon LLC. The bonds will bear a fixed interest of 2.45% and will be repaid in 48 equal installments. The Export-Import Bank of the United States is guaranteeing the bond payments.
El Al will use $47.6 million of the proceeds to replace the loan from the Canadian bank for the purchase of the first plane, and will use the rest of the proceeds to pay for the second plane, which will be delivered later.
Published by Globes [online], Israel business news - www.globes-online.com - on November 19, 2013
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