What is a credit bid? In certain circumstances, a secured lender can ‘bid’ its secured claim against the purchase price in a sale of the secured assets. The secured lender can compete with cash bids for the collateral, bidding up to the face value (principal and accrued unpaid interest) of its secured obligation. Rather than paying cash for the collateral, the secured lender can offset the purchase price by the value of its outstanding claim against the collateral.

In the previous articles in our series Engine Leasing, the Fundamentals,  BCLP’s global aviation team has discussed the attraction of engine leasing and the key economic drivers.  It has discussed the legal risks associated with engine leasing and the mitigating impact that the Cape Town Convention (CTC) has had on those risks.  The team has also considered what additional steps and protections can be implemented in order to mitigate the risks associated with engine leasing and financing.  In this, the final article of our series, the global aviation finance team provides an overview of the sanctions issues affecting engine financiers and lessors and draws together the key conclusions in our series “Engine Leasing and Financing, the Fundamentals”.

In our previous article Engine Leasing, the Fundamentals – Legal Risks and the Cape Town Convention, BCLP’s global aviation team discussed the legal risks associated with engine leasing and the mitigating impact that the Cape Town Convention (CTC) has had on those risks.  In this, the third of our four part series focussing on engine leasing and financing, the aviation finance team consider what additional steps and protections can be implemented in order to mitigate the risks associated with engine leasing and financing more generally.