The long-awaited securitization of 100 Boeing 767 aircraft leased to the U.S. Air Force is currently in the structuring process and preliminary details could emerge sometime in October, sources said. The $10 billion-plus transaction needs Congressional approval, however, and while it could very well be three years until the bonds actually hit the market, the structure will be firmed up well in advance, sources said.
The challenge for structural agent and lead manager Citigroup Capital Markets will be for the securitization to be cost-effective for the government, as there has been much debate over the true cost of the proposed 10-year lease arrangement between Boeing Co. and the Air Force. Some in Congress, including Sens. John McCain (R-Ariz.), Carl Levin (D-Mich.) and John Warner (R-Va.), oppose the idea, arguing that an outright purchase of the aircraft would cost less.