JOL vs. JOLCO
JOLs and Japanese Operating Leases with Call Option (JOLCO) are both Japanese sourced lease transactions that provide for 100% financing, but there are important differences. JOLs are typically used in financing used aircraft purchased from an airline by means of a sale/leaseback or from a third-party lessor with an operating lease attached. The lease terms for JOLs are generally no longer than 10 years, though it depends on the asset variant and vintage. Lessees look at a JOL as an operating lease.
JOLCOs are typically used to finance new aircraft and have a minimum lease term of 10 years. Most importantly, JOLCOs have a call option (early buyout option or EBO), and lessees often expect to exercise the call option on the EBO date. Lessees look at a JOLCOs as a financing.
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