 CALC's second bond issuance in four months 'priced significantly lower'
August 16th 2016: Hong Kong-based lessor CALC has followed up its debut 3-year $300 million bond issuance in April with a 5-year $300 million bond issuance which has 'priced significantly lower' than its April issuance. Asian investors bought 93 per cent of the issuance which had a peak order book of $1.2 billion. China Everbright Bank Co., Ltd., Hong Kong Branch and DBS Bank Ltd. are engaged to act as the joint global coordinators, joint bookrunners and joint lead managers of the unsecured bonds issuance.
ALAFCO acquires 9 aircraft portfolio from GECAS
August 8th 2016: GECAS has disposed of a 9 aircraft portfolio to Kuwaiti lessor Aviation Lease and Finance Company (ALAFCO). The portfolio is made up of Boeing and Airbus narrowbodies and is the second aircraft portfolio that GECAS has sold in recent weeks following the sale of a 45 aircraft portfolio to Avolon.
GECAS closes $280m senior debt financing deal with Aerolineas Argentinas
August 4th 2016: GE Capital Aviation Services has completed a 10-year, $280 million senior debt financing agreement with Buenos Aires headquartered airline Aerolineas Argentinas. The debt is secured on four A330-200s powered by GE’s CF6 engines and three B737-800s powered by CFM56 engines. GECAS said in a statement the four A330s are scheduled to fund in 2016 and the three B737-800s in 2018.
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Analysis
CALC completes new 'rental realisation transaction' on three aircraft
August 3rd 2016: In a 'first-of-its-kind' arrangement for a Chinese lessor, China Aircraft Leasing Group Holdings has entered into a 'rental realisation transaction' on three aircraft structured into senior and junior tranches to meet the different risk appetites and return expectations of investors. Winnie Liu, Deputy CEO and CCO of CALC, said the new structure also keeps the all-in-costs at a lower level for CALC.
SMBC AC issues $500m senior notes, reveals operating profit of $530 million
July 20th 2016: SMBC Aviation Capital has closed its long-awaited $500 million senior unsecured notes offering and disclosed selected financial results for the first time. These show that in the year to end March 2016 it made an operating profit of $530 million, up 22 per cent on the preceding financial year, on revenues of $1,046 billion, up 15 per cent year-on-year.
Chinese lessor IPOs struggle
July 14th 2016: Two Chinese lessor IPOs completed in the past two months are struggling to perform on the Hong Kong stockmarket. BOC Aviation has dropped from HK$42 on its debut in early June to HK$38.6 at the time of writing. CDB Leasing, which was priced at HK$2, fell 7 per cent to HK$1.86 on its first day of trading on July 11th.
USD currency movements - a key short term indicator of the impact of 'Brexit' on the UK and eurozone aviation finance sectors
June 24th 2016: Sterling dropped by as much as 11% compared with its pre poll level, as the Brexit vote became evident overnight, but recovered to a net fall of c.7% off following the Bank of England's announcement of a £250bn intervention fund to calm markets. The selloff is a measure of the economic impact of the vote*, on aviation financing ultimately in sterling, but another aspect is the impact on euro sources, as the euro has fallen also, but by a lesser amount against the US dollar than the pound. After an initial tumble of c.8%, the euro recovered along with the pound to trade c. 5% off.
Delta Airlines and Burnham Sterling close $450 million in private placements, reaching over $1 billion in total transactions
June 8th 2016: Greenwich, Connecticut-based Burnham Sterling & Co. LLC (Burnham Sterling), the financial advisor specializing in asset financing, announced that it closed a $450 million private placement for the world’s second largest airline, Delta Air Lines (NYSE: DAL).
BOC Aviation IPO could pave way for other Asia lessor IPOs
The take private of Avolon by Bohai Leasing earlier in 2016, shrunk the universe of publicly listed pure play lessors back but with the upcoming IPO of BOC Aviation, the visibility and appeal of aircraft assets to investors should improve. BOC Aviation, aircraft leasing unit of Bank of China, is arranging an IPO currently, which has attracted China’s sovereign wealth fund and Boeing as anchor investors.
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