Jamii Bora Bank sold its Sh412 million Kenya Airways loan to rival NIC Bank after sidestepping the national carrier’s debt-to-equity transactions. The move saw the small lender receive an undisclosed amount of cash from NIC, which raised its exposure to the airline that is known as KQ by its international code. When Jamii Bora made the loan to KQ, it negotiated for an interest rate of nine per cent. NIC now holds the debt besides KQ shares that it received to cancel its previous loan of Sh2 billion to the airline. Most of the banks that lent to the airline have not disclosed the impact of KQ’s share price drop on their holdings of the company’s stock. The lenders, including Equity and KCB , have suffered a combined paper loss of more than Sh8 billion on their KQ shares as the airline’s stock plummeted amid continued losses. This means that banks will find it difficult to sell their holdings at a profit, with KQ’s continued losses and wipeout of shareholder funds making a recovery less likely in the medium term.