Irish aircraft leasing company Avolon plans to form a joint venture with Wells Fargo.
The JV, Avalon Capital Partners Limited, will build a fleet primarily through sale and leaseback transactions with airlines on new aircraft, acccording to a press release issued last week. It will focus on young, fuel-efficient single aisle and twin-aisle aircraft with an initial target portfolio size of $500 million. Wells Fargo will be the majority shareholder and provide banking and debt financing facilities for the business.
In 2012 Avolon raised $1.3 billion of new debt financing, bringing total debt raised to $3.7 billion from a wide range of financial institutions, including Wells Fargo, which has been a significant lender to Avolon since January 2011.
ACP will be headquartered in Dublin, Ireland. Existing Avolon and Wells Fargo team members will serve as ACP’s management team. Avolon’s chief financial officer, Andy Cronin, will serve as a director on the board of ACP. Daire O’Criodain, an executive at Avolon with extensive experience in the aircraft leasing industry, will serve as ACP’s managing director.
“Wells Fargo’s investment in this joint-venture reflects the growing institutional investor interest in aircraft finance and leasing due to the sector’s ability to deliver consistently strong risk adjusted returns,” said Cronin.