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Conyers acted as BVI legal counsel to Export Development Canada, Canada’s Export Credit Agency, in connection with the purchase and lease of four dual-class Bombardier Q400 NextGen aircraft from Bombardier Aerospace, following a letter of intent to acquire the aircraft signed at the Dubai Air Show.
Each aircraft is held in a bankruptcy remote British Virgin Islands orphan special purpose vehicle (the “Borrowers”), set up by Conyers. Export Development Canada, as lender, made available a loan to each Borrower to finance the acquisition of the relevant Canadian built aircraft. The Borrowers leased their respective aircraft to a British Virgin Island subsidiary of the Middle East lessor Palma IBDAR Aviation Limited, a joint venture between Palma Holding Limited and Ibdar Bank, which in turn subleased the aircraft to Ethiopian Airlines as operating lessee. Export Development Canada participated in the transaction alongside Palma IBDAR and the Bank of Utah.
In addition to establishing and administering the SPVs, Conyers, in conjunction with Holland & Knight, participated in structuring, drafting, negotiating and registering the security granted over the assets of each SPV together with providing transactional advice in relation to the New York law transaction documents and assisting with each closing.
Ethiopian Airlines currently operates a fleet that includes 13 Bombardier DHC-8-402 (Q400) NextGen aircraft. The British Virgin Islands are becoming an increasingly popular jurisdiction for establishing asset holding entities, and in particular, special purpose vehicles for use in aircraft financing transactions.
Export Development Canada is a Canadian Crown Corporation which provides trade finance and risk management services to Canadian companies to help them take advantage of global trade and investment opportunities.
The Conyers team led by Counsel Audrey Robertson, comprised Counsel Raymond Davern and Associates Oliver Richardson and Joshua Mangeot. Conyers worked alongside Holland & Knight.