Aviation finance—PDP financing
Produced in partnership with Norton Rose Fulbright
Aviation finance—PDP financing

The following Banking & Finance practice note Produced in partnership with Norton Rose Fulbright provides comprehensive and up to date legal information covering:

  • Aviation finance—PDP financing
  • PDPs and purchase agreements
  • What are Pre-Delivery Payments?
  • Purchase agreement terms
  • The PDP financing facility
  • Security
  • Legal issues
  • Governing law of contract
  • French law contracts
  • Consent
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for lending lawyers?

Pre-Delivery Payment financing (PDP financing) has developed into a commonly used financing tool for airlines and lessors. However, the increase in the number of PDP financings has led to close scrutiny by the aircraft manufacturers into the industrial and commercial issues which arise as a result of the involvement of a financier in aircraft purchase arrangements. In any PDP financing there may therefore be significant commercial issues to be negotiated, as well as sometimes complex legal issues, particularly in relation to security, to be considered.

PDP financing, and the protection available to any lender, is very different to the situation that exists under other types of aviation finance. Funding is provided while the asset itself is under construction and security cannot be obtained in the same manner as for a completed aircraft. As a result, the provisions setting out the steps

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