Helicopter lessor, Waypoint Leasing, in the past week announced that it secured $375 million of equity growth capital from funds affiliated with MSD Capital, L.P., Soros Fund Management LLC, and Cartesian Capital Group. According to the firm the investments will be used to expand of Waypoint’s global helicopter leasing operations. Milestone, the dominant player in the emerging helicopter leasing sector launched in August 2010, initially raising US $500 million in seed capital which has allowed the firm to develop a fleet of over 90 AgustaWestland, Bell, Eurocopter and Sikorsky aircraft valued at over $1.3 billion.

Milestone initially used equity to finance its deals but then was successful in raising debt finance led by Deutsche Bank which was a first ever for a helicopter leasing firm in a series of debt facilities totalling US$400 million. and also in the capital markets when the company sold $250 million of senior notes in the 144a private placement market.

Waypoint Leasing was founded by Ed Washecka, Allan Rowe and Swati Rishi in 2011. Washecka launched the helicopter leasing business of Era Group Inc. in 2005 with a single aircraft. When he left Era Group in 2011, the Era leasing portfolio included 45 aircraft on lease in a dozen countries with a market value of $350 million.

Aviation Finance interviewed Washecka about the firm's plans and the potential of the helicopter leasing market:

Ed Washecka

What are Waypoint's plans for expansion? How do you see your fleet growing over the next year and the next three years?
Our growth ultimately depends on the market and how much value we provide to our customers. Our investors have made a sizable initial equity commitment. As a group, they certainly have the capacity to make further investments as we grow.

In addition to the recently announced equity investment how do you plan to fund these growth plans? (equity/debt). Do you plan to use ExIm financing as part of your funding strategy?
By my nature and my past experience at SEACOR and Era, I am conservative when it comes to leverage, but we do plan to make prudent use of debt. At some point, that could include ECA financing.

Following your multi-aircraft order with AgustaWestland in March do you have plans for further direct OEM orders or will you look at purchase/leaseback type transactions to expand?
Our focus will be on growing with sale/leaseback transactions with operators, whether existing aircraft or new delivery aircraft these operators have on order.

How big is the opportunity for Waypoint in the helicopter leasing market and what locations and sectors present the biggest opportunity?
Realistically, the market is not huge. I have been in the helicopter leasing space since 2005, and it is a niche market. It is a growing niche, but it won't ever be the size of the fixed wing market. I think there is room for Waypoint, especially given our investor base and our focus on sale/leasebacks, but it does not make sense for lots of people to place big orders on shiny, new helicopters. End user demand, whether oil and gas, EMS or firefighting, is finite.

What are the benefits and advantages of helicopters as an asset class?
For a customer, they make doing a difficult job a little bit easier. For a lender, the constant refurbishment of components means the asset should be recognized as good collateral and they can move easily to different applications.