Aviation Finance

Developments

The December 1st edition of Aviation Finance is published
December 1st 2016: In the latest issue of Aviation Finance: The impact on aircraft financing if Dodd-Frank is repealed by the incoming US administration; SMBC Aviation Capital's Michael Weiss on aircraft investing and aircraft investors; Another nail in the coffin of VLAs? OEM orders - past peak or just a short pause? AVi8 Air Capital's strategy; The year ahead for aircraft investors.

KBRA rates Labrador Aviation Finance Limited
November 23rd: Kroll Bond Rating Agency (KBRA) has assigned preliminary ratings to two classes of notes issued by Labrador Aviation Finance Limited. The aircraft ABS will be backed by a portfolio of 20 aircraft, currently owned by affiliates of GECAS, which will be purchased through the proceeds from the sale of the notes. The aircraft are on lease to 16 airlines in 15 countries with an initial total value of approximately $928.0 million. GECAS will act as the servicer for the transaction.

 

Perspectives

Selling the 'Toyota Corollas of the sky'

SMBC Aviation Capital's Michael Weiss describes a recent sales pitch with an investor more familiar with shipping.

Aergo's plan for recessionary times
GECAS' Sean Flannery on the aircraft leasing market
Astro's Johnny Lau on Chinese lessors' global ambitions

See the Aviation Finance Perspectives Series here.

Analysis

The November 17th edition of Aviation Finance is published
November 17th 2016: In the latest issue of Aviation Finance: Cyclical moments?: After the US Presidential election; AERGO Capital chiefs Fred Browne and Gerry Power talk in detail to Aviation Finance about their business model, and where we are at in the cycle. Their views provide considerable food for thought; Warren Buffett buys 4 airline stocks, committing +1% of Berkshire Hathaway's portfolio - is this a cyclical moment in aviation finance?


AeroTurbine downsizing, older aircraft sales hit AerCap Q3 earnings, but firm authorises another $250m stock buyback
November 8th 2016: Releasing Q3 earnings today, Aercap reported net income of $225.6 million, down 23.2% on the $293.9 million of the same period in 2015. It reported earnings per share (diluted) of $1.22, compared with $1.48 for the same period in 2015, down 17.6%. The reduced figures reflected sales of older aircraft, a lower net gain on assets, and a corresponding decline in average lease rents, which were 6.6% lower than in Q3 2015.

The November 3rd edition of Aviation Finance is published
November 3rd 2016: In the latest issue of Aviation Finance: Basel IV proposals and the challenge they pose to the future health of the aircraft financing markets; End of lease planning: survey shows lessors unimpressed by lessee preparedness; ALC's prepares its first ABS, Apollo prices ABS; Analysis: the rise of Asian leasing; Aircastle results; European short haul market; Willis moves quickly to acquire TES; Avolon's CIT acquisition funding.

 

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Aircastle's post-Halloween surprise spooks investors
November 3rd 2016: The extent to which impairments can affect an otherwise good performance - and scare investors in the process - is reflected in the market reaction to Aircastle's Q3 results, writes John Stanley. In its release on November 1st the company highlighted that its total revenues in Q3 were $194.7 million, total lease rental and finance and sales-type lease revenues of $187.3 million, while net income was $27.4 million, or $0.35 per share (and adjusted net income of $29.7 million, or $0.38 per share) compared to a net loss of $14.0 million, or $0.17 per share in the same three months of 2015.

Avolon sees strong demand from banks to provide debt for CIT transaction
November 3rd 2016: Avolon has placed 35% of the US$8.5 billion debt financing facilities, led by Morgan Stanley & Co. LLC (Morgan Stanley) and UBS Investment Bank (UBS), for the acquisition of the aircraft leasing business of CIT Group Inc.

ALC brings younger planes, longer leases to market in first term securitisation
November 1st 2016: In the first term securitisation of aircraft managed by Air Lease Corporation, Blackbird Capital Aircraft Lease Securitization Ltd 2016-1 and US LLC 2016-1 is seeking to raise $800.0 million Asset Backed Notes to purchase a young fleet of 19 aircraft on lease to 16 airlines located in 13 countries. Blackbird is a joint venture between Napier Park Global Capital (US) LP and ALC. The portfolio includes one aircraft, a 787-9 not scheduled for delivery until next January, which is subject to an LOI in respect of a 12-year lease with Air Canada.

 

Analysis

BOC closes $1.5b syndicated revolving credit facility
October 31st: BOC Aviation has closed a $1.5 billion unsecured syndicated revolving credit facility which was increased from an initial launch size of $1 billion. The company said in a statement that the facility comprises two tranches of $750 million each, with tenors of three years and five years respectively. It is BOC Aviation's largest ever financing transaction.

Willis Lease Finance swoops for Total Engine Support
October 27th 2016:Willis Lease Finance has purchased the business and assets of Total Engine Support Limited (TESL) from Wales-based TES Aviation Group after the parent company went into administration.

Perception gap between lessors and lessees identified in new research by IBA
October 26th 2016: New research from aviation consultancy IBA on aircraft redeliveries highlights a large perception gap between lessors and airlines in relation to the redelivery of end of lease aircraft. The research shows that over 80 per cent of lessors thought that lessees engaged too late on at least 50 per cent of returns. The research is published in a new paper Redeliveries Revisted published by IBA.

Avolon to acquire aircraft leasing business of CIT Group with combined fleet of 910 aircraft with value of over US$43 billion, creating the world’s third largest aircraft leasing platform.
October 6th 2016: Avolon Holdings Limited, a wholly owned subsidiary of Bohai Capital Holding Co.Ltd. listed on the Shenzhen Stock Exchange announced an agreement to acquire the aircraft leasing business of CIT Group Inc. (NYSE: CIT). The deal will create an in-service, (owned and managed) and committed fleet of 910 aircraft valued at over US$43bn. The transaction is subject to required regulatory approvals, including approval from the US SEC, and is expected to close in Q1 2017.

GECAS delivers first A320neo to AirAsia
September 15th 2016: GECAS has delivered its first A320neo to AirAsia. This isthe first aircraft in a 5 aircraft sale/leaseback transaction that GECAS has agreed with AirAsia for the new technology narrowbody. Significantly, this is the first A320neo to enter GECAS' portfolio and also the first A320neo to enter AirAsia's fleet (of the circa 400 it has on order).


AerCap delivers its first Airbus A320neo on lease to Volaris
September 12th 2016: AerCap Holdings N.V. (NYSE: AER) today announced the delivery of its first Airbus A320neo on lease to Volaris, making the airline the first carrier in North America to operate the aircraft type. This is the first of 10 A320neo aircraft to deliver to Volaris by AerCap, with a further 6 A321neo aircraft on order, delivering through 2018.