GE Capital Aviation Services is marketing $709 million of notes backed by aircraft leases, according to Kroll Bond Rating Agency.
The transaction, Labrador Aviation Finance, will issue two tranches of notes: $603 million of series A with an initial A rating and $106 million of series B notes with an initial BBB rating. All of the notes have a final maturity of January 2042.
Proceeds will be used to purchase a fleet of 20 aircraft on lease to 16 airlines located in 15 countries. The portfolio has an initial value of approximately $928.0 million, based on the average of the base values provided by three appraisers as of December 31, 2015, which includes an adjustment by Morten Beyer & Agnew to reflect the expected maintenance condition of each aircraft as of Dec. 1.
GE Capital Aviation Services Limited is the servicer;Mizuho Securities USA Is the sole structuring agent and bookrunner.
Among the major credit considerations, according to Kroll, is the fact that the aircraft are younger, relative to these transactions with an initial weighted average age of approximately 4.9 years.
"All of the aircraft in the Portfolio are in-production models and, as a result, KBRA believes that this transaction represents one of the more liquid securitized aircraft fleets in the market. KBRA views the aircraft in this transaction as attractive leasing assets due to their young age, broad user base and strong marketability for re-leasing to other operators beyond the expiration of the initial leases.”