The first export credit agency (ECA) on-lending aircraft transaction in over a decade has closed on Thursday 30 May 2013.

The transaction will finance four A320-200s for Shenzhen Airlines. The fronting ECA is Coface, while the on-lender is Export Import Bank of China (Chexim). BTMU is acting as ECA lender.

The ECA on-lending transaction was closed in compliance with the 2011 Aircraft Sector Understanding (2011 ASU), the rules that govern export credit support for aviation. The deal marks the first time a financing of this type has been done by European ECAs or US Ex-Im since early 2001.

Under ECA on-lending a fronting ECA offers a guarantee to an ECA lender. This ECA lender advances a loan to a local bank. The local bank on-lends the loan to an airline, which then purchases an aircraft directly from the manufacturer.