 PIMCO & GECAS to create $3bn Aircraft Leasing Platform
October 19th 2020: PIMCO, one of the world’s premier fixed income investment managers, and GE Capital Aviation Services (GECAS) have reached a preliminary agreement to develop an aviation leasing platform to support up to $3 billion in aircraft asset financings. The platform will enable PIMCO and GECAS to acquire new and young aircraft to lease, It is aimed to provide financing to help airlines upgrade their fleets at 'a critical time for the aviation industry'. The transaction is subject to customary closing conditions and regulatory approvals.
In the October 15th 2020 edition of Aviation Finance - Latest operating results from leading lessors show resilience
An improved trend in lease revenue collection in Q3 at Avolon, financing transactions for approximately $2.2 billion at AerCap; $7 billion in available liquidity at ALC and an owned-aircraft utilisation rate of 99.7 per cent at BOC Aviation are some of the positive features highlighted in the latest business performance updates by four of the leading lessors for the third quarter; But: a significant proportion of lease deferrals currently being granted to airline customers by lessors will end up being written off, according to a new in-depth sectoral report by Moody’s Investors Services; Also: Norwegian converts $1.9 million lease debt into bonds.
In the October 1st 2020 edition of Aviation Finance- Signs of optimism as some clouds grow darker
A darker September, linked to the evident resilience of the virus, despite recovery in some passenger markets, notably China but Kroll nonetheless sounds a note of optimism: ‘air passenger demand will rebound to levels seen pre-pandemic, as it has done through all previous downturns’. In the meantime, portfolios will continue to change, as IBA forecasts, and others, for example, CDB Aviation, take advantage of opportunities the turmoil is uncovering; Also: AerCap, Avolon, ACG in fund raisings; US Court approves Aeromexico PBH deal; TAP defers lease payments; AA and SkyWest in new Treasury loan agreements; Air Canada extends funding terms; El Al unhappy with new shareholder; SAA ceases all operations; Ryanair offers ‘2-for-1’ flights; Genesis appoints O’Byrne to lead trading team.
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Analysis
In the September 17th 2020 edition of Aviation Finance - In a world of no winners, the question is how bad will it be?
The articles in this issue of Aviation Finance reflect the continuing uncertainty – and confusion – that is being experienced in the commercial aviation ecosystem. The upsurge in infection rates in many countries is causing carriers to scale back their capacity plans and industry veterans, such as aviation finance consultant Peter Chang, are taking a cautious view of how the landscape is set to change. At the same time, investors demonstrated enthusiasm for Ryanair's first note issuance in three years and CarVal Principal Justin Bradburn is now talking about preparing for ‘very attractive investment opportunities’ arising from ‘perhaps the most distressed environment that the aviation industry has faced to date.’
In the September 3rd 2020 edition of Aviation Finance - Lessors continue to restructure portfolios
Lessors continue to cancel orders and sign sale and leaseback deals; The impact of lease deferrals on cash flows and asset values could put pressure on lessor balance sheets; Test flights for the aircraft formerly known as MAX commence outside US; Silver lining: the air cargo recovery continues; Qantas and Air New Zealand opt to take pain now; Qatar warns Boeing to ‘stand with us’; EVA adjusts Dreamliner order; Brennan bows out as Stellwagen gets new owners.
In the August 20th edition of Aviation Finance - Aircraft leasing continues to hold its head above water
Air Freight & Conversion programmes: as revenues exceed expectations; Activity details in sale-and-leasebacks; BOC Aviation details careful navigation of Covid-19 crisis as Bob Martin describes ‘the most volatile that we have navigated our way through in our 26 year history'; Op-Ed: Innovation and leadership are desperately needed to bring air travel back: Joe Gill; IATA revises recovery projections down for third time; Qantas' pandemic impact revealed, as Bain outlines plans for Virgin Australia; a new platform focussed on aircraft leasing opportunities for Korean investors; a new name for Max.
In the August 6th 2020 edition of Aviation Finance - returns heading to 10 p.c.?
Could Covid drive unlevered investor returns on aircraft back up to around 10 per cent? European air traffic is rising slowly, but is still less than half of last year’s level; ACG cuts planned capex to $1.3bn for next 18 months; Kroll Bond Rating Agency downgrades 138 aviation ABS securities and affirm the rating of just one; AerCap looks forward to a return to market equilibrium, when airlines can cover cash operating costs; CDB in three-plane US sale & leaseback deal and delivers ‘Chinook the Gray Wolf’ to Frontier; Nordic Aviation scheme approved; Hawaiian Airlines launches EETCs.focussed on aircraft leasing opportunities for Korean investors; a new name for Max.
In the July 23rd 2020 edition of Aviation Finance
Regulatory issues which emerged in Japan and the US have prevented the deal between MUFG Bank and DVB closing; ACG closes jumbo bond; Aercap buys back $1.45bn in outstanding notes; GECAS appoints Buckley as SVP & Regional Manager for Commercial, Europe & Canada; CDB Aviation appoints O'Neill as CFO; Embraer delivered four commercial planes in Q2; Jet Time files for bankruptcy; Cathay Pacific profit warning; Icelandair Group expects $100m operating loss; China traffic update; SR Technics to ‘stick to the knitting’; airBaltic secures €250 million in new equity; Air Serbia in debt restructuring talks with Etihad; Virgin Atlantic recapitalises; Bondholders still seek Virgin Australia deal; Cargojet raise C$100m; DHL Express orders four BCFs; World's first hybrid electric 70+ seater aircraft; 'A reasonable recovery in air travel over Europe, but traffic at this peak time of year is still running at less than half of last year’s volume'.
In the July 9th 2020 edition of Aviation Finance
Sale and leaseback deals, designed to inject liquidity into carriers, are growing in evidence, with private investors as well as lessors taking an interest. Latest deals involve Apollo and Merx Aviation with Delta Airlines, Falko also with Delta, SMBC Aviation Capital with easyJet and Turkish Airlines, and CDB Aviation with SAS; Lessors detail rent deferral terms, with Avolon reporting that it collected two thirds of lease payments due in H1; Consultancy IBA further revises values of aircraft down - with mid-life aircraft and those in their twilight years getting the sharpest discounts. It identifies young narrowbody values as having declined between 5-15% and out-of-production widebody by 20-40%, with mid-life and older current generation narrowbody values down 15-20%.
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