Buyers confident in the credit of Rolls-Royce PLC let the company and Greenwich NatWest know it as the $367 million transaction for Rolls-Royce Air & Engine found circles last week.

Notably well received, the investor base consisted of institutional investors in the double-digits. Greenwich NatWest agented the transaction.

The deal consisted of 10-year notes backed by a pool of 61 engines of a joint venture with GATX and a Rolls-Royce subsidiary. It priced at a spread of 250 basis points over Treasurys.

While there was some concerns over the structure, ultimately buyers looked at the credit of Rolls-Royce. "It really came down to the credit of Rolls-Royce...those who bought the deal felt comfortable with the name," said one source close to the transaction. "It was nothing like an EETC or a synthetic lease structure or anything sexy like that."

Another contributing factor to the success of the deal was the light activity in the investment-grade private placement market. "Some buyers have portfolio issues or working on credits they already have in house," said one source. "I think its starting to shut down for Memorial Day weekend."

According to a recent report issued by the company, global demand for aircraft engines will be around 48,100 units at about a $337 billion value, between 2000 and 2019.

Based in the U.K., Rolls-Royce is the largest aircraft engine maker in the world behind General Electric Co. It reported sales of $7.5 billion and net income of $428 million in 1998. - Akil Salim Roper

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