Malaysia Airlines taps lenders for first jet financing since restructuring

Malaysia Airlines is tapping banks to fund about nine Boeing 737 MAX planes in what will be the carrier’s first jet financing with lenders since it was restructured more than three years ago, sources familiar with the situation said. The financing represents a key test for the airline, which was taken over by Malaysian sovereign wealth fund Khazanah Nasional in December 2014, months after MH370 disappeared and MH17 was shot down over Ukraine. Finance industry sources, speaking on condition of anonymity, said Malaysian, European and Chinese banks are expected to compete for financing of the planes, for which Malaysia Airlines sent out a request for proposal a few weeks ago. The jets have a list price of around $1b, but airlines typically receive large discounts from manufacturers. Though the aviation financing environment remains strong, sources said Malaysia Airlines’ poor operating performance and a forced haircut taken by banks and lessors on finance and operating leases during the airline’s restructuring could make some banks wary of a financing deal with the carrier.<br/>