Apollo PK Air Management is preparing to launch a $728 million securitization backed by revenue from aircraft and aircraft engine loans.
The transaction, P ALIFT Loan Funding, series 2025-1, will issue notes through five tranches of A, B, C and D notes, all due in November 2042, according to Kroll Bond Rating Agency. The assets—called collateral obligations—include 71 narrowbody aircraft, which make up 70% of the pool.
Other assets include 10 freighter aircraft, accounting for 13.7% of the pool; four widebody aircraft, which represents 5.4% of the pool; and 12 regional jet aircraft, which makes up 5.1% of the pool, among other assets.
Based on the collateral balance, the notes have initial loan-to-value (LTV) ratios of 46.9% on the A-F and A notes; 52.4%, 62.4% and 66.1% on the classes B, C and D notes, respectively.
In terms of credit enhancement, the notes benefit from overcollateralization, a cash reserve until the August 2025 payment date, a principal liquidity account and subordination, the rating agency said. Notes will be repaid on a pro rata basis monthly without any cash leaking to equity.
Also, after the receivables' aggregate principal reduces to 40% of its value at closing, P ALIFT will pay remaining principal from the collateral obligations sequentially. Also, under those circumstances, principal payments can no longer flow to the equity holders while the notes are outstanding, KBRA said.
RBC Capital Markets, Mizuho, BNP Paribas Securities, Apollo Global Securities and SMBC Nikko are the deal's joint bookrunners.
The rating agency said 82 of the 114 loans, representing 76.4% of the portfolio's value, has a final balloon payment. In total, balloon payments represent 35.6% of the initial aggregate loan balance with a weighted average (WA) facility LTV of 28.3%.
KBRA assigns AAA to the A-F and A notes; AA, A and BBB- to classes B, C and D.
