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Asia-based BOC launches first aircraft lease ABS in four years

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BOC Aviation Ltd., a leading Asia-based commercial aircraft leasing firm, is returning to the securitization market for the first time in four years with a $548 million transaction.

Silver Aircraft Lease Investment Ltd. is backed by aircraft leases on 17 passenger jet planes – 15 narrowbody and two widebody – that will be acquired from proceeds from the note sale.

The aircraft securing the asset-backed offering consists of younger mid-life aircraft with a weighted average of six year, with remaining terms of 5.4 years. The planes will be among 500 aircraft that are owned, managed or on order by BOC with an estimated value of $15 billion, according to presale reports.

Both Fitch Ratings and Kroll Bond Rating Agency have assigned A ratings to $443 million in Class A notes. A triple-B rated Class B tranche sized at $73 million and a Class C series of notes totaling $32 million rated BB round out the transaction, the first for Singapore-based BOC since closing on an $807 million lease securitization in September 2015.

Deutsche Bank if the sole structuring agent and lead bookrunner.

The 17 planes include seven models made either by Boeing or Airbus. The three largest airline exposures in the transaction are a Boeing B787-8 aircraft to Kenya Airways (representing 16.9%) of the portfolio value; Hong Kong-based Cathay Pacific, with a Boeing B777-300ER making up 15% of the pool value; and three B737-700 aircraft on lease to Southwest Airlines (11.4%).

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Aircraft lease securitization