ECA Financing

Major structural changes of the global aircraft financing market since 2008: Goldman Sachs' analysis reviewed
Goldman Sachs published a review of changes aircraft financing over the past 6 years that include an assessment of the debate over the future of EXIM bank.

Signals point to capital markets growing competitiveness versus ECA financing and commercial lending in 2013
Exim Bank's Robert Morin speaking at the ISTAT Americas conference in Florida said that the peak has been reached for Ex Im financing in 2012 and that it will fall in 2013, confirming the strong theme coming out of ISTAT Americas 2013 that the capital markets will be of greater importance for airlines and lessors alike. This comes as banks are becoming less competitive on pricing relative to the capital markets and products such as EETCs.

Ex-Im Bank's 2012 strategy
In an exclusive interview with Aviation Finance, Robert Morin, vice president of the Export-Import Bank of the United States' transportation division, discusses the strategy of the Ex-Im Bank at a time of historic support for US exports and in particular, exports of US manufactured aircraft. He also discusses access by start-ups to ECA support and the importance of helicopters and executive jets to Ex-Im's mandate.

US Government signals increased financial support for aircraft manufacturing
Financial difficulties continue to surface as US Government signals increased financial support for aircraft manufacturing.

Asian and Middle Eastern markets figure at Singapore Air Show
Indonesian airline LionAir signed Boeing's biggest ever order at the Singapore airshow, in a drive for growth that was also evident in Garuda's acquisition of 24 Bombardier jets. Middle Eastern sources also feature as a source of funding as Emirates turns to Islamic banks to finance the purchase of three new aircraft. At the same time the US Ex-Im bank has declared that a 'golden age' for business jet ECA financing lies ahead.

Air India to receive $1.3 billion loan guarantees in record breaking year for US Ex-Im bank
October 7th: The Export-Import Bank of the United States has approved approximately $25 billion in authorizations in fiscal year 2011 through August 2011 - an all-time Ex-Im record, including $1.3 billion in loan guarantees supporting Boeing commercial aircraft sales to Air India. Air India has pending orders for 27 Boeing 787 Dreamliners, the deliveries of which are expected to begin over the next two months.

Opportunity for those with solutions as a new aircraft financing gap opens up
Amid the current financial uncertainty some very fundamental assumptions inherent to the nuts and bolts of how airline operational business models function and how their aircraft financing needs are addressed are being challenged. CIAN DOOLEY on the current financing landscape.


Ryanair's Treasurer on the financing background to the carrier's $15.6 billion Boeing 737 NG order
Following Ryanair's $15.6 billion order for 175 Boeing 737s, a deal hailed by US President Obama during Saint Patrick's Day events in Washington DC, Aviation Finance spoke with Ryanair's treasurer, JAMES DEMPSEY, on the flexibility of its financing programme for its fleet over the next five years, used aircraft value trends, its counterparty relationships in the aviation finance marketplace, the rationale behind a NG order only, and Ryanair's views on the MAX.

US Ex-Im backed PFN bonds oversubscribed at record low spreads
Aviation Capital Group and Ryanair have just issued Ex-Im backed bonds at historically low spreads. LCC Ryanair firstly showed its debt markets prowess by issuing bonds at a new low rate on September 6th and then this week Newport Beach-based lessor ACG went even lower. Both the low spreads and the oversubscription that both issuances of the pre funded notes (PFNs) met (respectively 3 and 4.7 times), shows the success of a product that provides an enhanced return over US Treasurys, with the backing of the United States Government - a 'nobrainer' that Ryanair, ACG, and earlier, Lan Airlines were happy to exploit.

EETC launched at lowest ever coupon
This month saw Continental Airlines issue a huge EETC worth nearly €900 million at the lowest coupon yet, while Flydubai indicated its intention to pursue Ex-Im bank financing, a contentious issue at present in light of disputes over the remit of export-import banks. Meanwhile, orders for the 737 MAX meant that Boeing beat Airbus' sales in Jan-Feb.

'History shows that human ingenuity has always come up with financing sources and that aircraft for reasonable credits always attract finance' - Colm Barrington
Aviation Finance editor KEN O'BRIEN interviews COLM BARRINGTON, CEO of quoted aircraft lessor FLY Leasing, and non executive chairman of Aer Lingus, the Irish carrier, on the 'funding gap', the financial economics of aircraft leasing, and the business model of NYSE-quoted lessor FLY. He says there may be a lack of appreciation of the value of certain types of aircraft assets in the public markets in particular.

US 'white knights' reported as standing on sidelines ready to support aircraft funding
U.S. banks that could pick up slack or buy any loan portfolios up for sale as a result of the euro funding crisis include J.P. Morgan Chase & Co, Wells Fargo & Co, Bank of America, and Citi. Societe Generale and BNP Paribas have been scaling back their aircraft financing business in the wake of the sovereign-debt crisis and the dollar shortage hitting European banks. "It's bad news given European aircraft manufacturer Airbus and U.S. rival Boeing Co. are funded in dollars and French banks arrange about 30 p.c.of financing", DJ said.

Airbus to bridge the gap 'if necessary'
Airbus has said it will help its customers with financing if the European debt crisis makes it necessary and has said it has been in discussions with export credit agencies, who stepped in with guarantees during the 2008 crisis when market funding for aircraft was not available.

Aviation Finance Commentary: aircraft financing - deja vu again
September 20th: The Airbus COO John Leahy was quite explicit yesterday (Sept 19th) in pointing out concerns about commercial bank financing in the aircraft market.


Aviation Finance Special Features

Aviation Finance special features