Global Jet Capital is back to raise money from the capital markets, issuing some $608.9 million in notes from the Business Jet Securities (BJETS) 2021-1 trust, secured by a variety of user leases and loans on business jet aircraft. Some of the proceeds from the transaction will redeem notes from a previous deal, the BJETS 2019-1.
Deutsche Bank Securities is lead structurer and lead bookrunner on the deal, while Global Jet will act as servicer. The notes will be issued from a three-tranche capital structure where the class A and class B notes amortize according to a 12-year, straight-line schedule, while the class C notes pay down over six years, according to Kroll Bond Rating Agency.
KBRA says it expects to assign ratings ranging from ‘A-’ on the $512.8 million class A notes to ‘BB’ on the $35.8 million class C notes.
Business Jet has several forms of credit enhancement to the notes, including an arrangement that will accelerate principal payments to the notes if certain reactive performance triggers occur, KBRA said. For instance, if the delinquency ratio exceeds 5.0% for any given 12-month period, or if the net loss ratio exceeds 4.0% for any 12-month period on all loans, these circumstances might trigger an early amortization event, KBRA said.
BJETS 2022-1 differs from previous deals in several ways. The transaction to come has fewer obligors and assets—37 and 48, respectively—compared with BJETS 2021-1, whose obligors and assets numbered 46 and 49, respectively.
On a weighted average basis, the aircraft in the securitized pool have a higher weighted average age, 7.6 years compared with 6.3 years from the BJETS 2021-1, KBRA said.
The loans financing the aircraft have a total loan-to-value (LTV) ratio of 80.7%, compared with 85.0% on the previous deal, according to KBRA.
As for changes in the transaction structure, the class A LTV test payments will be made ahead of class B scheduled principal in the priority of payments. Class A and B have a faster amortization profile, at 12 years instead of 12.5 years on the previous deal. Natixis will provide a liquidity facility to meet a liquidity reserve requirement, KBRA said.
