Japan-headquartered MUFG Bank has closed a 12-year, yen-equivalent US$123 million Japanese operating lease with call option (Jolco) financing with Philippine low-fare airline Cebu Pacific.

The bank acted as the mandated lead arranger, sourcing and arranging both debt and equity portions in this Jolco transaction. The bank also served as the account bank, facility and security agent, and main lender in the financing. The transaction is secured by two new Airbus A321NX aircraft, a modern new-generation aircraft type core to Cebu’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. The facility, the bank says, also reaffirms its ability to leverage its global banking network to structure tailored solutions to support its clients.

Aviation finance is a crucial growth pillar for the bank, it points out. Its global aviation finance office (GAFO) leads and manages its aviation portfolio and coverage of aviation clients on a worldwide basis as part of its broader global corporate banking business. With key hubs in London, New York, Hong Kong, Singapore and Tokyo, the GAFO has played an instrumental role in building resilience in the bank’s aviation portfolio amid the Covid-19 pandemic while also successfully delivering many new transactions across a range of aviation products.

“The Jolco market continues to be an attractive financing option for selected clients across the region,” notes June Raj, the bank’s managing director and head of aviation finance, Asia-Pacific. “This latest Jolco transaction once again demonstrates our 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 […] they continue to grow from strength to strength.”