Aviation Finance

Developments

In the latest edition (November 25th): Orders optimism from Airbus and Boeing, while ABS and leasing sector look up
November 25th 2021: Speaking at the successful Dubai Airshow last week Airbus CCO Christian Scherer, said ALC’s huge order for a total 111 new aircraft ‘signals we’re moving beyond the COVID doldrums’; The ABS sector remains resurgent, with two more aircraft ABS launched since the last issue of Avation Finance . Carlyle Aviation Management is sponsor and servicer of the $619.7 million AASET 2021-2 Trust, secured against an all new technology portfolio of 14 new narrowbody aircraft and one Dreamliner, and Stratos has closed its second ever securitisation, the $706.5 million SOLRR 2021-1, secured on 22 narrow-body aircraft; Grupo Aeromexico is to raise $1.3bn through various financing parties to enable it to exit Chapter 11; The continued surge in interest in P2F conversions is analysed, plus: Macquarie places five A220-300s with Air Senegal; CALC places A320neos with Play; ELF purchase and lease back on 25 engines; New digital Aviation Record System.

In the November 11th edition: Leasing sector gears for recovery
November 11th 2021: Improved market conditions are benefitting the leasing sector, with the new enlarged AerCap preparing to flex its muscles as the world moves out of lockdown, while institutional investors continue to show a strong appetite for assets in the ABS market and private equity investors commit substantial sums to avail of new opportunities: IATA has supply chain concerns as air cargo demand remains strong: BA agrees GBP1 billion UKEF facility; EXIM approves $194m loan guarantee for Copa Airlines; Castlelake six plane deal with Avianca; DAE profits dip; Willis Lease Q3 results.

 

Perspectives

Avolon upsizes revolver, aims to be a leading freight lessor

Commits to 30 Airbus A330-300s P2F conversions with Israel Aircraft Industries between 2025 and 2028


Anton Tams, GECAS on electronic maintenance records

Trevor Ricards, GECAS on ABS
DVB's Kieran O'Keefe on the lease rate factor (LRF)
IBA's Dr Stuart Hatcher on lease rates

Analysis

In the October 28th edition: AerCap-GECAS deal set to close
October 28th 2021: GE and AerCap have now obtained all the required regulatory clearances for the merger of the GECAS business into AerCap from about 20 countries and the latter has successfully raised $21 billion in longer-term funding on capital markets to part fund the deal; Avolon prepares for ‘a robust recovery’; EUROCONTROL more optimistic about pace of recovery; SMBC Aviation Capital raises a further $500m; Five key trends likely to affect future of commercial aviation; BOC Aviation Q3 update; DAE bolsters liquidity


In the October 14th edition: Airline industry losses continue to be pared back
October 14th 2021: Airlines set to lose $52bn this year and $12bn in 2022, significantly below the estimated $137.7 bn loss of 2020; Tata buys back Air India for $2.4bn; AerCap Q3 update; DAE's 147 lease deals; Aergo sale & leaseback with Iberia; Air Asia agrees restructured deal with Airbus; Brazil ECA support for Embraer sales in US; Qantas finalizes 10-year fleet plans; Avolon upsizes its unsecured revolver facility to $4.3 bn and commits to 30 Airbus A330-300s P2F conversions with Israel Aircraft Industries.

In the September 30th edition: Innovation to the fore
September 30th 2021: First AFIC-supported financing of a JOL; Sirius aspires to fleet of 100 planes in three years; Chorus Aviation closes $85 million deal; ACG closes $750m Senior Unsecured Notes; Davidson Kempner launches new platform.

 

Aircraft Leasing & Lessors

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Aircraft & Airlines

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In the September 16th edition: Up to 10 new ABS deals before year end in prospect
September 16th 2021: Ryanair and Boeing in standoff over new mega order as Boeing logs 23 net new aircraft orders; Bain-backed lessor places new planes order; ALC, Spirit Airlines agreements on 15 aircraft; GECAS delivers A321NX to SalamAir; ATR 72-600s lease placements with IndiGo, SKY express and Windrose; Philippine files for Chapter 11; Atlas Air, DHL Express extend freighter agreements; Mammoth launches 777 P2F programmes; BBAM leases for two A321P2Fs to Lufthansa; Royal Aero delivers B737-700 for part-out; Avia Solutions partners with Certares; Watson joins Vmo as US lessor expands into Europe; Spicejet reaches MAX agreement with lessor; DAE retires Senior Unsecured Notes.

In the September 2nd edition: Capital and credit markets continue to revive as Goshawk taps the USPP market and BOC agrees $935 facilities
September 2nd 2021: The continued buoyancy of credit and capital markets for aviation funding remains in evidence. Goshawk raised over $200 million on the US Private Placement market in a landmark transaction while BOC Aviation has agreed two upsized unsecured syndicated credit facilities amounting to $935 million. In this issue we also report on a strong pick up in orders and potential orders for Airbus and Boeing.


In the August 19th: Growing confidence in aviation ecosystem
August 19th 2021: Taken together, many of the stories in this issue reflect the growing confidence emerging across the aviation ecostructure. Latest data from Eurocontrol shows traffic is now in line with the most optimistic scenario it published at the beginning of June. The successful IPO of electric air taxi developer JOBY, Breeze Airways raising of $200 million in a funding round led by BlackRock and Knighthead Capital Management, and the exceptional pricing of ALC’s public offering of $600 million three year unsecured notes at 0.80 per cent and $500 million seven year notes at 2.10 per cent all demonstrate that the appetites of serious investors for aviation exposure has yet to be sated.

 

Analysis

In the August 5th edition: Lessors: 'inflection point' has passed as cash flows recover
August 5th 2021: The mood of renewed optimism in the aviation finance sector is palpable. AerCap’s Aengus Kelly, Avolon’s Domhnal Slattery and DAE Capital’s Firoz Tarapore all report significant progress, especially in terms of cashflows and confidence about the recovery now underway – albeit with understandable degrees of caution. IBA’s Phil Seymour, too, is impressed by the performance of the industry, saying ‘hats off’ to participants in the ABS market for making investors feel confident. The range of new aircraft orders now being placed or contemplated, too, also reflects an industry coming up for air.

In the July 22nd edition: Private equity's march continues
July 22nd 2021: While there has been a waning in the appetite of some bankers for debt financing in the aircraft space, PE has shown a growing hunger for this opportunity, as reflected in this issue. Castlelake features strongly as a provider of finance and a provider of investment opportunities. There is also continuing evidence of strong interest in fleet modernisation by major carriers, not all involving brand new aircraft.


In the July 8th edition: evidence of longer-term confidence in the industry
July 8th 2021: In this issue we review business updates for Q2 for three of the largest aircraft large lessors. It shows that they remain extremely busy in terms of their transactional activity, continuing to execute new lease agreements and actively buying and selling aircraft. United orders 270 planes; BOC Aviation profit warning; Investors warm to Icelandic airlines; Korean merger gets green light; Plans for new Saudi national carrier confirmed; Air France-KLM raises €800m; Blackbird Capital II closes; CDB Aviation acquires Max 8s from DAE; Lessor deliveries; Flannery appointed CCO at SMBC Aviation Capital.


In the June 24th edition: Bulls in sight
June 24th 2021: Although IATA data still reveals the disparate experience of recovery by carriers, evidence that investors are confident about the long-term future remains strong. In this issue we talk to SMBC Aviation Capital’s CFO about his latest 7-8 times oversubscribed $500m note issue, note the return of serial issuer ALC to the ABS market, KKR’s acquisition of an $800m loan portfolio from CIT and Avolon’s order for up to 500 electric aircraft. We also talk to ABL Aviation CEO Ali Ben Lmadani and CCO Michael Weiss about why they are enthusiastic about the potential for returns in mid-life vintage assets.


In the June 10th edition: The patterns of reconstruction start to make themselves evident
June 10th 2021: More ABS activity, and the signs of recovery, notably in the new orders area show signs of the pattern of the recovery, or, more accurately described, reconstruction effort, after Covid. The recovery in the global airline system is being led as North America shows the strongest signs of rtecovery, while other regions, such as South East Asia remain slow to show signs of pick-up; Is the clock ticking for Power by the Hour (PBH) deals? Peter Aldis, Senior Asset Manager at IBA, considers the likely outcome; Muzinich & Co has raised an initial $300 million seed capital from European institutional investors for its Aviation Senior Secured Strategy aircraft debt financing fund; United my be set to boost Boeing’s order book further for a large narrow-body aircraft order that could include at least 100 Boeing 737 MAX 8s.


In the May 27th edition: shoots of recovery
May 27th 2021: IATA is now forecasting that traffic levels will increase to 88 per cent of their 2019 pre-Covid levels and to 105 per cent the following year; Moody’s Snr. VP Mark Wasden now expects the recovery in air travel will propel lessors’ profitability higher by 2023; Air Lease Corp prices $1.2 billion Senior Notes; Ryanair issues €1.2bn 5-year Eurobond; PE jv acquires NAB $1.1bn loan portfolio; Apollo & Merx in sale & leaseback with Air France; AeroCentury makes Q1 loss; Fitch stays ‘negative’ on aircraft ABS; GECAS leases more 737-800 BCFs to ATRAN; First European operator of B737-800SF; ST Engineering to lease A321P2Fs to GlobalX; Aircastle delivers Embraer 195 to KLM; Sirius acquires five planes from BOC.