Aircraft lease payments will secure the notes being issued from two entities under the Blackbird Capital II Aircraft Lease name, one operating from the U.S. and the other from Ireland.
Called BBIRD together, the two issuers have initial assets consisting of 18 aircraft, primarily Airbus. Fifteen of those aircraft have a lease commitment, or are on lease to 12 lessees located in 11 countries, according to an initial assessment from Moody’s Investors Service. Two are in production, with deliveries scheduled for October and November, and another aircraft is off lease.
Blackbird Capital II Aircraft Lease Limited (BBIRD Cayman) and Blackbird Capital II Aircraft Lease US LLC (BBIRD USA) will co-issue the notes. The BBIRD Cayman will purchase the aircraft from established Blackbird entities or third-party sellers.
The notes are expected to garner ratings of ‘A1’ on the $630 million series A notes, and ‘Baa1’ on the $115 million series B notes.
Ultimately, the aircraft securing the lease payments are considered strong assets, because of their large installed and diversified operator bases. New technology aircraft that are less than three years old and highly liquid make up 71% of the deals assumed value. The planes include 36% of narrowbody A320neos/A321neos, and 35% of widebody A330neo. The rest of the pool consists of current technology narrowbody aircraft ranging in age from four to 11 years old.
With long life expectancies, the aircrafts’ depreciation schedules could last beyond the scheduled amortization of the notes. That means the combined loan-to-value (CLTV) could decrease over time. BBIRD notes have an anticipated repayment date of July 2022, with a legal maturity of July 2046.
Air New Zealand and Delta Air Lines are among the lessees, and because they have relatively strong corporate credit, Moody’s expects strong lease cashflows. Contractual lease payments are expected to be enough to pay 96% of principal and interest due on the rated notes, assuming no cash leaks to E notes. Remaining airlines are either low-cost operators in their respective markets, or the flagship carrier in the operator’s home market.
Bank of America Securities, Inc., Mizuho Securities USA LLC, Citigroup, and BNP Paribas are lead underwriters on the deal.
Air Lease Corp. is one of the largest aircraft leasing companies globally, and is the servicer on the transaction.
