Business Jet Securities is preparing to issue about $575 million in securitized bonds that tap aircraft lease and loan revenues to repay investors.
BJETS has missed only one year selling aircraft loans and lease securitized bonds since 2017, according to deals tracked by Asset Securitization Report's Deal Database, and that was in 2023. The deal will offer three tranches of class A, B and C notes with outstandings of $459.8 million, $73 million and $41.9 million, respectively, according to S&P Global Ratings.
All of the notes, classes A, B and C, mature on May 15, 2039, and in coupons of 6.45%, 7.50% and 9.80%, respectively.
BJETS 2024-1 has leases and loans on 31 business jets in the collateral pool, 12 from Gulfstream and 11 from Bombardier, the two largest contributors. Otherwise, Dassault, Cessna and Embraer contribute eight contracts between them. The assets also include originations transferred from BJETS 2020-1. Manufactured between 2004 and 2023, the jets have a weighted average (WA) age of 6.76 years and a remaining term of a little over six years, S&P analysts said.
As of the Jan. 31, 2024 cutoff date the collateral represented twenty-nine borrowers in nine countries. The jets have an initial asset value of $729.9 million. Those underlying borrowers are involved in 18 industries, with finance accounting for the largest proportion (22.1%), S&P analysts said. Real estate, business services, entertainment and leisure and computer hardware make up the rest of the top five, representing 13.39%, 12.11%, 11.70% and 6.30% of the pool, respectively.
The sponsor's absence from the market did not seem to translate to a heftier offering, as the volume seemed typical of the program—barring its $1 billion debut, deal amounts have hovered between $517 million-$674 million.
Kroll Bond Rating Agency also weighed in on the notes, and assigns preliminary ratings of A, BBB and BB to classes A, B, and C, respectively. S&P analysts, assign A, BBB+ and BB to the notes, it said.
