Leasing Business Aergo acquires Seraph Aviation, becomes $7bn business
Leasing Business NAC exits Chapter 11 with bold growth ambitionsAs it emerges from Chapter 11 Nordic Aviation Capital says it is ‘firmly positioned to remain the world’s leading regional aircraft lessor and deliver on its strategy to become a top 10 single-aisle commercial jet lessor’ with a significantly deleveraged balance sheet and access to increased capital to support growth. As a result of its re-organisation it has eliminated nearly $4.1 billion of debt and significantly enhanced its liquidity, with access to approximately $537 million in additional capital to fund operations and growth opportunities. Air Freight AerCap takes 100th 737-800BCF as freighter conversion market flourishes
Leasing Business ‘Right transaction’ makes SMBC Aviation Capital world’s second largest lessor
Leasing Business Avolon founder Slattery to step down as CEO, director
Leasing Business Aergo Capital sets its sights on $10bn AUM
Leasing Business The acquisition of FLY Leasing by Carlyle Aviation Partners for $520mThe Carlyle Group has emerged as the winner in the competition to acquire Fly Leasing, agreeing to pay $17.05 per share in cash, representing a total equity valuation of approximately $520 million. The total enterprise value of the transaction is approximately $2.36 billion. Carlyle Aviation Partners, which came into being following the acquisition of Apollo Aviation by the Carlyle Group in early 2019, will use funds from its fifth aviation fund, SASOF V, for the acquisition. Leasing Business - Sanctions Significant number of lessors affected by sanctionsIt is estimated that of the 980 commercial passenger jets currently in operation with Russian carriers 777 are leased. Of these, 515 jets with an estimated value of $10 billion are leased from non-Russian lessors. Covid-19 response Irish aircraft leasing industry acts to secure and deliver PPE to the Irish healthcare system from China as part of the response to the Covid-19 crisis
Aviation Finance and Ireland as IFS Centre Beyond Brexit: IDA Ireland's strategy in 2020 of cementing a diversified financial centre to span ‘the full value chain’
Aircraft Leasing New CDB Aviation CEO prepares for next phase in international platform’s developmentAs CDB Aviation moves into its next phase of life as a maturing global leasing platform new CEO, Patrick Hannigan, discusses the value of portfolio acquisition as a means of new customer acquisition, the logic behind the expansion of the C suite to increase focus on risk management and identification of growth opportunities and his plans for the next three years. Risk Management GECAS's Chief Risk Officer gives insight into the global lessor's risk management model
Rating agency warns ‘current lease-rate factors in many narrowbody-aircraft transactions are not sustainable’German ratings agency Scope has sounded a warning note for the aircraft financing industry in its 2020 Aviation Finance Outlook report. It says that the unsustainability of current lease-rate factors in many narrowbody-aircraft transactions is a hidden risk that will materialise should market conditions worsen. In a separate report, it also predicts further consolidation of European airlines this year. It maintains that while there will be little change in lease-rate factors in the first half of the year, high aircraft values and low lease-rate factors which do not reflect the commercial and operating risks facing airlines leave it vulnerable. Airlines Business European carriers step up to oppose UK Government's move to provide state aid to struggling FlybeJust two weeks ahead of Brexit, the UK Government has issued an ambiguous signal regarding state aid conventions in Europe as it made clear it was prepared to provide financial assistance to help keep domestic carrier Flybe afloat. The response from competitive airlines has been immediate with Ryanair's CEO, EasyJet and AIG strongly criticising the move. Questions are also being asked as to why the Government is prepared to help Flybe when it refused to provide any help for Thomas Cook last year. A former lecturer of the Ryanair CEO, Michael O'Leary, Trinity College Dublin economist and pro Chancellor, Sean Barrett (pictured) told Aviation Finance: 'subsidising airlines to do something that is inefficient may not be a good idea'. Global Taxation & Aircraft Leasing BEPS implementation likely to impact aircraft leasingAspects of the OECD’s BEPS programme, primarily targeted at the cross-border activities of tech companies, will have some unintended effects on aircraft lessors. Speaking at the recent Aviation Finance's AFCDublin, 2019 conference EY tax director Michael Moroney identified two elements of BEPS – tax treaty access and interest limitation – as two key areas for the aircraft leasing industry. Perspectives Slattery: Increased M&A activity inevitable as lessors search for scale
Global Aircraft Registration Centre Irish-based International Registry of Mobile Assets contract renewed for five more years
Special Report: Ireland as an aviation finance hub Aviation Finance Special Report: Ireland: International Aviation Finance Hub
Leasing 'Operating lease killer' offers innovative secured aircraft funding model to airlines in $5bn plan
Capital Markets Success of SMBC Aviation Capital's debut notes issuance the result of 'years of work, not months' - CEO
Interview FPG Amentum to stay true to its third party business model
Interview Irish-based lessors form new representative body
Leasing Structures Aircraft ownership – the Irish connectionSuzanne Hannon looks at recent changes to Irish law and their affect on Irish SPVs, how the changes interact with Irish tax and corporate law and what it means for aircraft lessors. Interview From 2013's wargame to 2014's reality - AerCap's acquisition of ILFCInterview with Aengus Kelly, CEO of AerCap NV on the quoted lessor's audacious corporate action to acquire ILFC announced last month, and which is expected to close in the middle of Q2, with Aviation Finance's editor Ken O'Brien, and Joe Gill, contributing editor. Capital Markets S+P rating moves Ryanair towards bond issuanceRyanair secured a highly valued BBB+ rating from S+P in the agency’s first formal review of the company. With a S+P rating that is above those of Lufthansa, BA and Southwest Airlines, Ryanair is currently the most highly valued airline globally by S+P. JOE GILL examines the implications for the company, which would need another rating to facilitate an offering. Debt Capital Markets Deal Analysis: the innovating Fan Engine SecuritizationOne of the most innovative engine securitisations since the credit crisis of 2007-8 has been the US$250 million Fan Engine Securitization notes issued on 31 October 2013, which kickstarted a securitisation that had been abandoned in the poor market conditions of 2008. Ryanair raises Ex-Im finance at record low spread of 1.73 p.c. US Ex-Im backed PFN bonds oversubscribed at record low spreadsAviation 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. Aircraft Leasing Avolon-Wells Fargo structure advances asset management versus metal ownership debateA deal announced by the lessor Avolon and US West Coast-based financial services group Wells Fargo in January furthers the debate about optimal structures for investors in air finance. Aside from its innovative company format the joint venture, Avolon Capital Partners, also underlines the evolution of asset management as a core competency within the aircraft leasing industry. Taxation Legal opinion of Advocate General of the ECJ on the 'look through' exemption welcome news for lessorsThe ECJ's release of the legal opinion of the Advocate General is welcome news for the aviation leasing sector as it maintains the 'look through' exemption that means that the supply of aircraft to companies who do not operate the aircraft themselves should not be liable to VAT, according to Ernst and Young's Brian Keenan. Taxation There has been rapid growth in usage of Irish Section 110 aircraft finance structures since they were introduced in 2011Since February 2011, Ireland has seen rapid growth in the use of “Section 110 Companies” for aircraft finance and leasing structures. WILLIAM FOGARTY and DAVID MAUGHAN of Maples summarise the key features of the new vehicles and reflect on a number of practice points which have emerged. The vehicles offer new options for the direct holding of plant and machinery, including aircraft and engines. Irish Competitiveness 'A leading edge over other global locations particularly for public lessors' says Colm Barrington on Ireland as an aviation finance centre
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Aircraft Leasing Debt finance likely to be key differentiator for new PIMCO-backed platform
Aircraft Leasing Lessors’ share of global fleet ‘only going one way’
Taxation Taxing times for aircraft lease negotiatorsThe constantly evolving global tax environment has been feeding into lease contract negotiations for some time now. In this article Dominic Gormley and Jack Stokes of PwC discuss the background to this evolution, the risk it puts on lessors and how that risk can be mitigated. Leasing Business NAC reaches Restructuring Support Agreement which will gives creditors majority ownershipNordic Aviation Capital, which won the Irish Scheme of Arrangement Award in the 2021 Deals of the Year Awards presented by sister publication Finance Dublin, has now reached a Restructuring Support Agreement with the majority of its lenders to strengthen its capital structure and position the leasing company for long-term growth. The deal will see majority ownership pass to its largest creditors. Legal Sanctions present varied legal issues for lessorsResponding to questions from Aviation Finance, Marie O'Brien, partner in the A&L Goodbody LLP Finance Department and head of the firm’s Aviation and Transport Finance team, provides insights into various legal aspects of the EU sanctions on Russia as they affect aircraft leasing companies. Leasing Business US Court confirms NAC reorganisation plan
Aircraft ABS & Capital Markets Leasing industry has ‘crossed the Rubicon’ – but the question is will it stay there?In his latest Aviation Industry Outlook Dick Forsberg, Senior Consultant to PwC's Aviation Finance Advisory Services, identified the emergence of a number of distinct trends in aviation finance. Aviation Finance spoke to him about two of them – the evolution of the ABS sector and the changing role of capital markets in new aircraft deliveries. Lessor Taxation The implications of COVID-19 for lessor assessment of expected credit lossesWith airlines continuing to seek rental payment deferrals, lessors need to be clear and consistent in how collectability considerations are reflected in their expected credit loss (ECL) impairment assessment and recorded in the profit and loss account, writes EY’s Niamh Tobin Aviation ABS Investor enthusiasm for innovation highlights renewed strength of ABS marketThe aircraft securitisation market is enjoying a sharply increased flow of note issuances in the closing months of this year. Over the past two weeks alone there have been issuances from Carlyle, DAE and World Star plus a novel and highly successful offering from Stonepeak Partners and Bellinger Asset Management. These follow recent offerings by Avenue Capital/Deucalion, ALC and Apollo Navigator, as well as the earlier refinancing of a 2017 ABS by Castlelake. Leasing Business AerCap acquisition of GECAS is cleared for take-offWith all regulatory hurdles now cleared and AerCap having secured $21 billion on capital markets, the largest ever merger of two aircraft financing entities is set to close next Monday, November 1. Organised in the midst of the worst crisis to ever hit the commercial aviation sector, the acquisition of GECAS by AerCap creates an aircraft leasing giant. The enlarged entity will comprise approximately 2,000 owned and managed aircraft, with an average age of about seven years and an average remaining lease term much the same. It will also have over 900 owned and managed engines, over 300 owned helicopters and approximately 300 customers around the world. New Frontiers in Electronic Aircraft Maintenance Records Electronic maintenance records will help lessors deliver on their promise of flexibility and growth to customers
Aircraft Markets Pandemic will test lessor balance sheet strength, ABS investor enthusiasmWhile the coronavirus pandemic will affect all parts of the aircraft leasing sector negatively, the experience for each lessor will be markedly different, with their level of indebtedness being a significant factor, according to IBA President Phil Seymour. In an interview with Aviation Finance he also discusses his concerns about the effect it will have on future investor sentiment towards the sector. Aircraft Leasing Patrick Hannigan replaces Peter Chang as CEO at CDB Aviation
Aircraft Leasing Interview: Conlon succeeds Burger as CEO of GECAS
People Moves: IBA Group appoints Ian Beaumont as Chief Executive Officer of IBA Group11th March 2020: IBA Group has appointed Ian Beaumont as Chief Executive Officer, effective today. Phil Seymour, IBA’s former CEO will continue to serve as Company President. In a statement IBA said: "For the past five years the business has been successfully led by Phil Seymour and has seen a period of rapid growth with both its core professional and advisory services, as well as the powerful data platform, IBA.iQ. Airline failures can help lessors manage marketsThe benefits of a ‘normal’ level of airline failures to the aircraft leasing community, the current position of the aviation finance market in its business cycle and the broader value of lease extensions to the airline industry in the wake of the MAX groundings were all topics discussed at an evening debate held in Dublin recently to mark the launch of aviation consultancy IBA’s new iQ Engines valuation tool. Speakers at the event were Shane Matthews, Head of Strategy and Market Analysis at SMBC Aviation Capital, Andy Carlisle, Chief of Industry Affairs at Goshawk, and Phil Seymour and Dr Stuart Hatcher of IBA. Leasing firms recruit finance, technical and risk expertise for their expanding operations in Hong Kong and DublinOver the past decade the aircraft leasing market has evolved internationally and the sector now employs over 25,000 across the globe. As 2019 draws to a close Garret Kearney reviews the drivers behind recruitment activity in the sector internationally over the past decade and anticipates likely developments in the future. Seabury Capital and White Oak beef up their aviation financing consultancy offeringsReflecting the growing requirements of the aviation industry for sophisticated financing solutions, two significant players have recently upscaled their activities. Seabury Capital Group has acquired Structured Finance International and integrated it and its existing aviation financing consulting within a new advisory practice, Seabury Aircraft Capital. White Oak Aviation has expanded with three high profile hirings from the aircraft leasing sector, Bob Genise, Asa Watts and Greg Byrnes. Perspectives GECAS keen to see development of secondary equity market for securitizationsFollowing the closing of its second ABS this year, the 20 aircraft, $446.337 million note STARR 2019-2, Trevor Ricards, SVP with responsibility for US Asset Trading at GECAS, and Kumar Velayudham, Managing Director of the global diversified alternative asset management firm, Sculptor Capital, which has helped GECAS pioneer and develop the tradable e-note, discussed with Aviation Finance Contributing Editor John Stanley the background to this highly differentiated offering and their plans for the future development of this important market. Interview GECAS' strategy to rightsize its cradle-to-grave leasing model
Perspectives Interview: Aercap's Aengus Kelly - the long view
CEO Interview Despite general market jitters, aviation trends remain positiveFLY Leasing's CEO Colm Barrington looks at the global aviation industry in 2016 and says that despite uncertainties in the global financial markets, strong profitability from airlines and robust air traffic growth show that key trends for the sector continue on a positive track. He also remain bullish on the aircraft leasing industry, 'The growth of leasing is likely to continue from this level, particularly as interest rates and returns from alternative investments are likely to remain at historically low levels for at least the remainder of 2016.' Deals of the Year Awards 2014 Securitisation a first of its type in an aviation contextSPEs used in debt finance deal in 2008 were recycled for use in a securitisation transaction. The 'Aviation Finance' Conference, AFC Dublin 2018 Aviation Finance Conference 2018 puts spotlight on key issues in growth market
Capital Markets Capital markets funding is critical to the continued expansion of the aviation sectorThe first public rated aircraft securitisation since 2008, Emerald Aviation Finance Limited, highlights the sophisticated capital that is being attracted to the aviation sector say Laurence Hanley and Nollaig Murphy as investors seek the strong risk-adjusted returns that are achievable from the asset class. They discuss the structure of the transaction, and analyse some of the developments that are influencing the use of capital markets funding in the aviation sector. Deals of the Year Awards 2014 Emerald securitisation the first publicly rated aircraft securitisation since 2007
Interview Aergo Capital's plan for recessionary times - 'a nimble Sunseeker powerboat operating in a sea of tankers'
Islamic Aviation Finance & Ireland Aircraft leasing securitisation structures that are compliant with Islamic FinanceAfter a dip during the financial crisis of 2007-2010, there was a recovery in the use of Sukuk as an alternative source of funding for companies in the aircraft leasing sector. This article examines a growing interest in Ireland and some key tax issues that need to be addressed in structuring these investment propositions. Sukuk represent the Islamic equivalent of conventional bonds that can be issued to raise funding and allows financial institutions and similar entities to invest in companies in a manner that is Shariah-compliant. The use of Sukuk investment instruments have seen steady growth in recent years and levels of issuance returned to pre crisis levels in 2010 after a dip in 2008 and 2009, with over US$45 billion of Sukuk issuance in 2010 alone. Perspectives ICBC Leasing - the $2 billion dollar backed start up
Avolon wins Finance Dublin Award for GIC equity deal Avolon equity raise wins Private M&A Deal of the Year Award 2012A $300 million investment in Avolon by Singapore’s sovereign wealth fund in 2011 represented a major endorsement of the firm and the Irish aviation industry by a globally recognised investor, according to the citation received by Avolon for the deal, its second major recognition for the equity raising deal. Finance Dublin, a sister publication of Aviation Finance, awarded it its Private Mergers and Acquisitions Deal of the Year Award 2012, as recognition of the most notable such deal in Ireland in 2011. Irelandia's new LCC venture in Colombia Irelandia-backed airline launches as Colombia's first low cost carrierIrelandia-backed airline Viva Colombia, launched in May, is garnering a positive reception from the market at large. It is Colombia's first low cost carrier and emulates the low cost model of other successful airlines that are proving their resilience despite the challenging market conditions facing airlines. Deals Awards 2013 Debt Securities Deal of the Year: Ryanair Ex-Im bond the lowest ever spread for this type of instrument
Taxation Expanding tax treaty network increases Ireland’s attractiveness for aircraft leasingIreland’s supportive environment is one of a number of critical factors in maintaining its place as a world leader in the aircraft leasing space. In particular, many of Ireland’s domestic tax laws give rise to low effective tax rates and allow for efficient repatriation of profits to stakeholders. |