Global Jet Capital is marketing $663.1 million in aircraft-finance ABS bonds, secured mostly by operating lease contract receivables and interests in a fleet of 49 business jets.
Morgan Stanley is the lead structuring agent and lead bookrunner, according to presale reports from S&P Global Ratings and Kroll Bond Rating Agency.
S&P has assigned an A rating to the $538.3 million senior Class A notes in the transaction; Kroll rates the notes at A-. A $78 million Class B tranche has an expected rating of BBB from both agencies and a $46.8 million tranche of Class C notes is rated BB.
The Class A and B notes will follow a 12.5-year amortization schedule, but the transaction has an anticipated final payment data of six years after closing – in line with the weighted average remaining terms of 70 months on the static pool of leases and loans.
Unlike commercial aircraft ABS transactions, the leases and loans pooled into Business Jet Securities 2021-1 are triple-net obligations that assign maintenance, insurance and tax responsibilities to borrowers and lessees who have legal title to the aircraft.
The transaction has a high proportion of operating lease contracts, making up 91.2% of the pool's asset value. Only 8.8% of the pool involves financial assets such as loans or finance leases, compared to 37% in Global Jet's prior securitization in October 2020, according to the ratings agencies.
Obligors are typically mid- to large-sized corporates or high net worth individuals, according to the presale reports. The portfolio has experienced little economic impact from the COVID-19 pandemic, Kroll noted, with only limited payment deferrals being granted over the course of the past year.
The transaction is the fifth overall for Global Jet, which was established in 2014 by private equity investment funds involving The Carlyle Group, AE Industrial Partners and the FS/KKR Advisor partnership between FS Investments and KKR. The company focuses on financing smaller corporate jet aircraft from manufacturers such as Gulfstream, Bombardier, Dassault (Falcon), Embraer, Cessna (Textron), HondaJet or Pilatus.
While most of Global Jet’s initial business jet aircraft-related assets were acquired from GE Capital Corp. in 2015 and 2016, the current transaction features mostly originations by Global Jet.
