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Airborne Capital sponsors inaugural $637M aircraft lease securitization

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Airborne Capital Ltd. Is launching its first-ever securitization of commercial aircraft leases in a $637 million transaction.

According to Kroll Bond Rating Agency, Airborne – which was founded in 2017 – will market three classes of notes in a transaction dubbed Tailwind 2019-1, backed by a portfolio of 17 aircraft the firm will acquire on behalf of 15 global lessee airlines.

The Series A notes totaling $510 million, with a preliminary A rating from Kroll. The $81 million in Series B notes are rated BBB and the $46 million in Series C notes is rated BB-. The A and B notes will amoritize on a 13.5-year straight-line schedule while the Series C notes will amortize on a seven-year schedule.

The portfolio will consist of younger aircraft with an approximate age of 4.7 years, with remaining lease terms of 6.3 years. Fifteen of the aircraft are narrowbody models; the two widebody aircraft on lease to Air France and South African Airways make up 26.4% of the initial total portfolio value estimated at $767.5 million.

The 6.3-year remaining lease terms is longer than other aircraft lease securitizations, according to Kroll.

Kroll’s report states the ratings agency “views the aircraft in this transaction as attractive leasing assets due to their young age, broad user base, and strong marketability for re-leasing to other operators beyond the expiration of the initial leases.”

Kroll noted that at closing, up to 13 of the aircraft may not yet be owned by Airborne, but all are subject to binding purchase agreements with four airlines.

Airborne is jointly owned by management and India-based InterGlobe Enterprises Private Ltd.

Deutsche Bank, Mizuho Securities and Credit Agricole are serving as joint structuring agents and lead bookrunners; SG Americas is providing joint bookrunning support.

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Aircraft lease securitization