Commercial aircraft lessor Wings making 1st trip to securitization market
Wings, a commercial aircraft lessor focused on single-aisle, in-producion commercial jet aircraft, is making its first trip to the securitization market.
The $480 million transaction, Wave 2017-1, is backed by 19 aircraft on lease to 17 lessees located in 14 countries, according to Kroll Bond Rating Agency. As of Oct. 31, the weighted average age of the aircraft was approximately 7.2 years with a remaining lease term of approximately 4.1 years.
The portfolio consists of 18 narrowbody aircraft (88.1% by value) and one widebody aircraft (11.9% by value) with an initial value of approximately $578.4 million, based on the average of the half-life base values provided by three appraisers as of July 2017 and adjusted for maintenance conditions. It accounts for the approximately 86.4% (by number of aircraft) of Wings’ owned and committed portfolio.
Three tranches of notes will be issued in the transaction: $393 million of Series A notes are provisionally rated A by Kroll Bond Rating Agency; $57.8 million of Series B notes are rated BBB, and $28.9 million of Series C notes are rated BB.
Goldman Sachs, Credit Agricole Securities, and Wells Fargo Securities are joint structuring agents and bookrunners.
While Wings was founded just four years ago, in 2013, Kroll believes that the company has a highly experienced management team and the capability and experience to remarket, maintain and repossess the aircraft in the portfolio over the life of the transaction.
Wings is led by chief executive Stephen Hannahs, who co-founded Aviation Capital Group and served as CEO and group managing director until January 2013. The rest of senior management are also veterans of ACG and have 30 years’ experience in aviation leasing, on average.
The company is owned by Two Sigma Private Investments, Corrum Capital Management, and Wing’s management team. Current total equity is over $145 million with an additional $95 million of committed callable capital.
At closing, not all of the aircraft in the Portfolio will be owned by Wings. Approximately 33.2% of the Portfolio (by value), or six aircraft, are expected to be purchased from three lessors prior to the closing date. All of the aircraft will be subject to binding purchase agreements between the sellers and Wings.