AIP Capital Limited is preparing to service its inaugural asset-backed securities (ABS) deal, bundling lease revenue on 18 aircraft into $643 million in bonds, and selling the securities through the MC Aviation 2026-1 Limited and MC Aviation 2026-1 LLC.
Three tranches of A, B and C notes will be sold to investors, the bulk coming to market through the class A notes, according to analysts at Kroll Bond Rating Agency. All the notes have an anticipated repayment date of July 2033 and a legal final maturity date of July 2051.
The classes A, B and C notes have an initial loan-to-value ratio of 74%, 83% and 87%, respectively.
Deutsche Bank Securities, Fifth Third Securities and BNP Paribas Securities are joint structuring agents and joint lead bookrunners, with the deal expected to close around July 10, according to KBRA and Asset Securitization Report's deal database.
DBRS assigns (P) A (sf) to the class A notes; (P) BBB (sf) to the class B tranche; and (P) BB (sf) to the class C notes.
Morningstar DBRS says the closing date is expected to be July 16. The rating agency also finds that the series A, B and C notes benefit from credit enhancement levels of 26%, 17% and 13%, respectively.
Notes will derive their structural credit enhancement from overcollateralization, and several reserve accounts or liquidity facilities that will pay certain transaction and maintenance costs.
DBRS estimates that about 69% of lessees will default under 'A' category stress scenarios, while 58% will default under BBB category stresses, and 45% will default under BB category.
The Rule 144A transaction will make its first payment on Aug. 15, 2026.
As for the aircraft backing the leases, the initial pool consists of 17 narrowbody vehicles, including B737 MAX8s, A320/321s, and one A321 neo. They were manufactured between May 2012 and August 2023. There is also one widebody aircraft, a B787-9, manufactured in May 2025.
Other collateral pool characteristics include leases that are leased to publicly rated airline leases with ratings from the 'B' to 'A' (11%).
