IndiGo closes US$328m Citi and Credendo export credit financing

Indian airline IndiGo has closed a US$328m aircraft-financing transaction with Citi and Belgium’s export credit agency Credendo, establishing a new route for internationally supported aviation lending through India’s GIFT International Financial Services Centre.

The financing covers eight Airbus aircraft, comprising six A321s and two A320s, and marks Credendo’s first insured aircraft-financing transaction.

Citi acted as sole mandated arranger, export credit agency coordinator and sole lender. Credendo provided credit insurance supporting the financing, while the transaction was executed through IndiGo subsidiary InterGlobe Aviation Financial Services IFSC Private Limited.

The companies also describe the arrangement as the first export credit agency-backed aircraft-financing transaction structured through a GIFT IFSC leasing vehicle.

This combination is commercially significant because export credit insurance allows a lender to manage part of the credit risk associated with a large cross-border financing commitment.

Rather than relying exclusively on the airline’s credit profile, the financing incorporates protection provided by an export credit agency, potentially improving the lender’s ability to provide longer-term funding.

The exact insurance coverage, borrowing costs, repayment schedule and maturity were not disclosed. The announced US$328m represents the size of the financing transaction and should not be interpreted as confirmation that the entire amount has already been drawn.

For IndiGo, the arrangement offers an additional source of aircraft-financing liquidity as the airline continues expanding its fleet and international network.

The carrier placed an order for 500 Airbus A320-family aircraft in 2023 and has also committed to acquiring Airbus A350 wide-body aircraft. Access to diversified external funding is important for an expansion programme involving substantial capital expenditure over several years.

The transaction also gives Credendo an entry into aircraft finance. The Belgian agency said the deal forms part of a broader ambition to support aviation-related financing and Belgian participation in international aviation markets.

GIFT IFSC provides a platform through which Indian aviation companies can structure cross-border leasing and financing transactions with international institutions.

The development demonstrates how export credit agencies and global banks can establish new financing channels for Indian companies acquiring capital-intensive assets.

For export-finance providers, the precedent is particularly relevant because it extends the application of officially supported credit insurance into a leasing structure intended to facilitate international aircraft procurement.