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S. Korean investors profit on Air France’s early debt repayment

Collected: 2017.08.22

Distributed: 2017.08.23

Source: Go Direct

South Korea’s institutional investors Public Officials Benefit Association (POBA) and the Yellow Umbrella Mutual Aid will redeem their investment in a seven-year-old financing to Air France six years ahead of the maturity, reaping 6 percent in return and premium in just a year.

According to investment bank industry sources on Monday, a seven-year mezzanine to fund Air France’s $115.7 million lease of Boeing aircraft B777-300ER will be repaid in October, just a year after it was issued.

The Korean investors that put in $34 million will collect 1 percent early repayment fee on top of principal and interest.

The mezzanine fund was designed to deliver a fixed rate annual return in the 5 percent range for seven years.

The investment deal was arranged by Dongbu Securities Co. for the local institutional investors.

By Han Woo-ram

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