Goshawk's debut $529M aircraft ABS adds to growing 2Q sector tally
After a slow takeoff in the first quarter, a third aircraft lease securitization has launched since April through a debut offering from six-year-old fleet management firm Goshawk Management.
The $529 million Pioneer Aircraft Finance LLC is the first-time securitization by Goshawk, an Ireland-based specialist in younger-age aircraft on lease to global commercial airlines. The notes will be co-issued by Pioneer Aircraft Finance trusts in the Cayman Islands and the U.S.
The Pioneer transaction features three note classes: a $428 million Class A tranche with an initial A rating from both Kroll Bond Rating Agency and Fitch Ratings; a triple-B rated Series B notes tranche sized at $75 million; and a $26 million Series C notes tranche, rated BB by both agencies.
Both the A and B notes will amortize on a 14-year straight-line schedule, with the Class C notes on a seven-year schedule.
Goshawk will use the proceeds to acquire 18 aircraft that will be leased to 18 individual airlines in 15 countries. Most of the collateral pool’s value (79.1%) consists of the 16 narrowbody, single-aisle aircraft in the deal.
The pool also includes one widebody plane and a regional jet, in a pool with an appraised value of $640.1 million (maintenance-adjusted to $628.5 million).
The weighted average age of the aircraft is 5.3 years, with remaining lease terms of 5.1 years, according to a presale report from Kroll. All of the aircraft are owned by Goshawk.
Goshawk was founded five years ago, and has 221 aircraft on lease to 64 lessees in 34 countries. The net book value of the firm’s fleet is $11.6 billion – making Goshawk among the top 10 global lessors based on fleet value.
Goshawk invests in mostly younger aircraft types (3.2-year fleet average) that are more liquid and easier to place on lease. While the fleet in the Pioneer transact is relatively new, none of the planes involve the grounded Boeing 737 Max 8 narrowbody aircraft. (However, Goshawk has 20 on order from Boeing along with 20 new A320 neo aircraft from Airbus, all due for delivery between 2023 and 2025.)
The three largest lessees in the pool are Ethiopian Airlines, Indonesia’s Lion Air and Thai Lion Air. Ethiopian Airlines is leasing the lone widebody aircraft in the transaction, a Boeing 787-8, to be the airlines' second widebody jet+ in fleet operations.
The Pioneer transaction is the fourth this year in the aircraft lease ABS sector, bringing total issuance to $2.4 billion.
Goshawk's deal would be the third issuance to price since April 11, following Castlelake LP's $868 million Castlelake Aircraft Securitization Trust 2019-1 deal and GE Capital Aviation Services' $574 million START Ltd. 2019-1.
Goshawk in indirectly controlled by Hong Kong-based private equity firm Chow Tai Food Enterprises (CTFE) and its affiliate NWS Holdings in 2016. The management team includes Chief Executive Ruth Kelly, who previously co-founded RBS Aviation Capital.
South African banking and asset management firm Investec (JSE:INLP) was an original 20% shareholder in Goshawk but sold its stakes to CTFE and NWS in 2016.
Last year, Goshawk acquired Sky Aviation, in a deal that included servicing of SKY’s S-JETS 2017-1 asset-backed transaction.
Mizuho Securities is the sole structuring agent and left lead bookrunner on the Pioneer transaction.