The Sprite aviation securitization platform is taking to the securitization markets to raise $495 million from a pool of lease contracts on 30 aircraft assets. Notes will be sold through the Sprite 2026-1 Limited and Sprite 2026-1 US LLC.
All three fixed-rate tranches of notes have an anticipated repayment date of March 2033, according to Kroll Bond Rating Agency.
World Star Aviation, a full-service aircraft management company, is servicing its third portfolio of aviation asset-backed securities (ABS) assets, and expects to make monthly interest, liquidity advances, reserve account contributions and principal payments sequentially through the priority of notes before the anticipated repayment date.
The notes have a legal final maturity date of March 2041, KBRA said.
Mizuho Securities is the sole structuring agent and lead bookrunner, with MUFG Bank as the liquidity provider and UMB Bank as the security trustee.
Structural features
Sprite 2026-1's structure includes several structural elements that are familiar to aviation deals and meant to maintain cash flow to the notes.
Leverage is moderate on the assets, according to Fitch Ratings, noting that the series A, B and C notes have loan-to-value (LTV) levels of 72.4%, 831% and 96.8%, respectively.
There is a test for minimum assets, where the deal will use any excess ash to fully pay down the nots if the issuers do not own a minimum amount of assets, in this case eight aircraft.
The deal also includes a debt service coverage ratio (DSCR) calculated from a three-month lookback of cash flows to determine amortization triggers and cures. Sprite also includes a partial cash sweep. In year two for the series C notes and year three for series A and B, the transaction will include partial cash sweeps for all three series of notes, where the deal's excess cash will be used to repay the outstanding note balance.
A liquidity facility, representing nine months of interest, is also in place to help support the notes.
The securitization pool includes 28 converted freighters and one narrowbody aircraft undergoing conversion, and which is expected to be completed in August, according to KBRA.
KBRA expects to assign ratings of A and BBB to series A and B, respectively. Fitch expects to assign ratings of A, BBB and BB- for the A, B and C series, respectively.
