Korean institutional investors fund Air France

[THE INVESTOR] South Korea’s two institutional investors have made an investment in aircraft financing for French flag carrier Air France, according to sources on Oct. 26.

Public Officials Benefit Association and Korea Federation of SMEs invested US$34 million through mezzanine financing in a Boeing B777-300ER that will be leased to Air France on a 7-year term with an expected annual return of 5 to 6 percent a year.

Air France seeks to secure a total of US$115.7 million for the jet in which some European lenders will invest in equity and senior debt financing.

By Park Han-na (hnpark@heraldcorp.com)