Walkers and A&O Shearman have acted on Philippine Airlines’ (PAL) financing to lease a Rolls-Royce Trent XWB-97 jet engine for an undisclosed amount, marking the carrier’s first Export Credit Agency (ECA)-backed transaction in more than 12 years.
Finance partner Kristen Kwok led the Walkers team, advising on all Cayman Islands law aspects of the transaction.
Kwok told Asia Business Law Journal that Walkers acted for the ECA’s lenders, providing support on all Cayman Islands law involved in the finance-lease transaction. Kwok said this included the establishment of a Cayman orphan special purpose vehicle (SPV) as borrower, owner and lessor of the engine, and providing Cayman legal advice on the financing and leasing documentation.
“The deal is significant for PAL as it is the first export credit agency-backed financing raised by PAL in more than 12 years. We typically see ECA-backed loans for high-value aircraft and less frequently for engines,” said Kwok.
The Walkers professional services team also provided fiduciary services for the establishment and ongoing maintenance of the Cayman orphan SPV, added Kwok.
A 4 December Walkers statement said the firm’s team worked closely with lead counsel A&O Shearman on the transaction. Kwok said A&O Shearman acted as lead counsel to the ECA lenders with Brendan McCarthy heading the team.
A&O Shearman did not respond to requests for comment.
The transaction involved US bank Citi, with a loan guaranteed by the UK export credit agency, Export Finance. The Trent XWB-97 jet engine, acquired through this deal, will power PAL’s incoming Airbus A350-1000 aircraft, nine of which are currently on order.
