Apollo Aviation is marketing its first securitization of aircraft leases, according to Kroll Bond Rating Agency.
The $556.3 million Apollo Aviation Securitization Equity Trust 2014-1 will issue $422 million of loans with a preliminary A’ rating and $134.3 million of loans with a preliminary BBB’ rating. All of the loans amortize over 13 years; all of the loans have a final maturity of November 2029.
Goldman Sachs is the sole structuring agent and global coordinator.
Proceeds will be used to purchase a fleet of 40 in production aircraft leased to 20 lessees in 15 countries. The aircraft in the portfolio represent approximately 57% of Apollo’s portfolio as of July 30.
Apollo specializes in mid-life and end-of-life aircraft, which it acquires them in the secondary market. Typically the aircraft are already leased when Apollo acquires them. Over the past four years, Apollo has invested over $1.4 billion; it currently manages a fleet of 70 leased aircraft and 36 engines.
In its presale report, KBRA notes that lessors that focus on older aircraft have more options to exit investments at the end of a lease, because it is easier to sell aircraft that are already paid off.