Tuesday 14 June 2022
Asset managers update: Dr. Peters launches Backbone, Carlyle issues ABS
Asset managers have been active so far in Q2 2022 with several announced aircraft transactions, asset financing agreements, and staff hires. Over the past six weeks, some headline news included the launch of Dr. Peters Group’s new freighter leasing initiative, Backbone Freighter Leasing, as well as Carlyle pricing a $522 million ABS, AASET 2022-1, which funds the acquisition of a portfolio of 25 aircraft.
Dr. Peters launches Backbone Freighter Leasing
German asset manager Dr. Peters Group on 6th May announced the launch of its new freighter leasing initiative, Backbone Freighter Leasing (Backbone). Backbone is the launch customer of Kansas-based freighter conversion company Kansas Modification Center LLC, which will take charge of the passenger to freighter conversion of Backbone’s Boeing 777-300ERCF fleet. The initial firm order includes three slots for freighter conversions with deliveries in 2024 and 2025, and options for seven additional conversions in 2025, 2026 and 2027. The order and options total in value over $300 million.
Speaking with Ishka, Christian Mailly, managing director of Dr. Peters Group, notes that Backbone could look to acquire additional B777s while also monitoring the possibility of adding to its 10 existing conversion orders in the future.
“We are still looking for opportunities besides the Backbone venture but also for Backbone to potentially add other freighter aircraft. For example, if a lessor has the aircraft and we have the lessee, or if the lessee wishes a sale/leaseback solution for its freighter conversion with the KMC programme, these could be two potential opportunities where we can acquire aircraft. But I wouldn't rule anything out. What I would rule out is the possibility of us getting in deep with another conversion programme. We are very comfortable with the position we are in today and are 100% convinced of the programme we have decided on,” Mailly said.
The first conversion is set to begin in 2023 with the aircraft scheduled to commence operations in 2024.
Carlyle closes AASET 2022-1
Carlyle Aviation Management priced its $522 million aircraft ABS, AASET 2022-1, made up solely of class A notes on 8th June. Proceeds from the notes will be used to acquire a portfolio of 25 aircraft on lease to 12 lessees in 11 different jurisdictions. As of 30th April, the weighted average age of the portfolio was 7.9 years with a weighted average remaining lease term of 4.3 years.
The ABS portfolio consists of 24 narrowbodies and one widebody comprised of 11 Airbus A320-200s, eight Boeing 737-800s, four A320neos, one A321-200, and one Boeing 777-300ER.
Q2 2022 QTD updates
Aircraft transactions
Griffin Global Asset Management entered a sale/leaseback agreement with Akasa Air for five Boeing 737 MAX 8s on 9th June. The aircraft deliveries are scheduled to begin in June 2022.
Altavair closed a sale/leaseback transaction with airBaltic for four Airbus A220-300s on 31st May. The acquisition was funded by funds and accounts managed by KKR, with Altavair acting as servicer on the assets.
Sirius Aviation Capital acquired a portfolio of five single-aisle, mid-life aircraft from SMBC Aviation Capital on 30th May. Sirius entered into a joint venture with Carolous Aviation Leasing, a portfolio company of Corrum Capital Management, to acquire the aircraft which Ishka understands includes two Boeing 737-800s and three Airbus A320-200s.
The two Boeing aircraft are on lease to SunExpress (Güneş Ekspress Havacılık A.Ş) in Turkey while the Airbus aircraft are on lease to All-Nippon Airways/Peach Aviation in Japan, Iberia Líneas Aéreas de España in Spain and Volaris in Mexico. Ashland Place Finance LLC (Ashland Place), a commercial aviation financing platform, provided the financing.
Griffin Global Asset Management agreed on the sale/leaseback of five new Airbus A321neos with IndiGo on 23rd May. Upon the announcement, one aircraft had been delivered to IndiGo with the four remaining deliveries scheduled for May and June 2022.
Aircraft Leasing & Management (ALM) arranged the sale of a Boeing 737-800 to Aero Capital Solutions (ACS) on behalf of its parent company Fuyo General Lease (FGL) on 11th May.
Slovakian carrier Go2Sky leased a Boeing 737-800 from a Dublin-based lessor on 27th April. BBAM Aircraft Leasing acted on the lessor’s behalf and will also manage the lease.
Aircraft financing
Aergo Capital secured a $17.5 million loan facility from volofin on 1st June to assist in the financing and acquisition of five De Havilland Dash 8-400s on lease to Porter Airlines.
Sirius Aviation Capital and Ashland Place Finance agreed on the financing of two Boeing 737-800s and three Airbus A320-200s on 31st May. The Boeing aircraft are on lease to SunExpress and the Airbus aircraft to All Nippon Airways/Peach and Volaris.
volofin Capital Management structured and closed a $19 million loan facility to assist in the financing and acquisition of two Boeing 737-800 BCFs on lease to Bluebird Nordic for a subsidiary of Aergo Capital on 5th May.
volofin Capital Management completed the structuring and debt financing of two mid-life narrowbody aircraft on lease to American Airlines for Zephyrus Aviation Capital on 21st April.
Novus Aviation Capital and Aviation Capital Group (ACG) partnered up to provide financing for two Airbus A321neoLRs for TAP Air Portugal on 14th April. ACG provided a senior secured loan while Novus’s Tamweel Aviation Finance (TAF) fund provided mezzanine financing.
Aircraft deliveries
Zephyrus Aviation Capital delivered two Airbus A320-200s to Global Airways Lithuania on 12th May.
TrueAero delivered an Airbus A330-200 to Aerolineas Argentinas on 13th April, with the second A330 scheduled to deliver in the coming weeks (at the time of announcement).
Stratos delivered a Boeing 737-800 to Jet2.com on a long term operating lease on 6th April. The aircraft is part of Stratos’ securitised portfolio JOL Air 2019-1 and was recently returned from flydubai.
Staff moves and hires
Altavair appointed Brian Rynott as senior vice president, marketing – Americas on 15th June. Rynott held positions at Alinda Capital Partners, Intrepid Aviation and AWAS in the past.
Castlelake appointed Ronan Kelleher as managing director and CFO, aviation on 12th May. Kelleher joins from AMCK Aviation.
Bellinger Asset Management appointed Greg Hampton as CEO of its recently established Bellinger Credit business on 5th May. Hampton was at National Australia Bank prior to joining Bellinger.
Itochu appointed Yu Suzuki as vice president – marketing (Americas) on 4th May. Suzuki was previously at AMCK Aviation.
Acumen Aviation appointed Ian Clark, previously chief technical officer at Avolon, as advisor – asset management, on 4th May.
JLPS Ireland appointed Shane Carroll as general counsel and member of its executive team on 28th April. He previously held the title of head of legal.
Other updates
ITOCHU Corporation signed a contract with Etihad Airways under which it committed to supply Neste-produced sustainable aviation fuel (SAF) to the airline at a domestic airport, on 27th May.
Altavair opened a new office in Dublin, Ireland on 9th May.
Jetstream Aviation Capital selected Acumen Aviation’s SPARTA Asset Management ERP Platform to support its fleet on 13th June. The platform includes Lease, Maintenance and Project Management, and Records Dataroom modules.
ACC Aviation’s asset management division entered into a contractual agreement with an African lender and an African leasing firm to assist with the remarketing and ongoing management of its assets.
Note: The dates listed are the dates of announcements. Sources include press releases, job announcements, and Ishka research.
The Ishka View
Asset managers have been active in acquiring aircraft throughout Q2. Several asset managers have noted to Ishka the rising cost of debt is having an impact on the volume and pace of trading in the secondary market (see Insight: ‘Swap costs and missing ABS market slow aircraft trading’).
But Ishka notes that the sale/leaseback market continues to be particularly competitive helped by players with committed funding in place. Overall financing costs may be increasing due to rising interest rates but lessors confide that there appears to be slightly easier access to financing – demonstrated by the number of announced financing agreements over the past 10 weeks. Asset managers also confide that over margins for secured debt appear stable – helped by a number of alternative aviation lenders.
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