Alasdair Whyte

Posts Tagged ‘Export credit’

Air Lease Corporation files plans for IPO

In Aircraft export credit, Aircraft leasing on January 17, 2011 at 1:38 pm

Steve Hazy does not hang around. Air Lease Corporation only launched last year and is already planning its IPO (full filing here: http://www.sec.gov/Archives/edgar/data/1487712/000095012311003060/v57988orsv1.htm#101)

JP Morgan, Credit Suisse and FBR Capital Markets are underwriting the issue.

Air Lease has grown very quickly. By the end of 2010 it had already agreed to acquire 144 new aircraft and four used aircraft worth about $6 billion. This means it should quickly become one of the world’s top five aircraft leasing companies by 2017 even if it stops working on new deals.

Air Lease Corporation’s commitments

Aircraft type 2011 2012 2013 2014 2015 2016 2017 Total
Airbus A320/321-200
10 9 13 12 7 51
Airbus A330-200/300
2 4 6
Boeing B737-800(1)
5 3 12 12 12 12 9 65
Boeing B777-300ER
1 1
Embraer E190
4 8 3 15
ATR 72-600
2 8 10
Total
24 32 28 24 19 12 9 148

This is, of course, the second time that Hazy has floated. ILFC shares performed well before it was acquired by AIG. By launching now – at the bottom of the airline cycle – there is a good chance that Hazy will repeat this.

Air Lease also says it is close to agreeing export credit support from Ex-Im, the European agencies and BNDES.

The 10 biggest things that have happened to the commercial airfinance market

In Air law, Aircraft export credit, Aircraft leasing, Aircraft loans, Airline finance on January 7, 2011 at 9:52 am

As I am in a reflective mood this are my first thoughts – please let me know if you disagree.

The Cape Town Convention
Although criticised by some for not leading to real changes but Cape Town is an amazing achievement that no other industry has matched. The Aviation Working Group is an amazing coalition of different groups and the key participants who have driven this have done a wonderful job.

Swissair
A blue chip, flag carrier that failed. Swissair was an airline that every bank wanted in their portfolio until 2001. Its hunter strategy should serve as a warning to other airlines. Somehow more of a shock than US airline bankruptcies.

Boeing Capital and the 787
It is easy to criticise Boeing’s launch of the 787 – particularly the numerous delays – but Boeing Capital deserves huge credit for realising the importance of financiers. From the start Boeing Capital Corporation actively went out and pitched the new aircraft to financiers. This may seem obvious now but it a new strategy at the time (particularly since Airbus had stronger links with European lenders).  Now all commercial aircraft manufacturers – and some engine makers like CFM – spend a lot of time communicating with financiers.

Listed leasing companies
With AIG buying ILFC,  the failed GPA float and the short life of AerFi (which successfully floated but was then acquired by what is now AerCap) this model had not really been tested.  Genesis, AerCap, Babcock & Brown Air and Aircastle changed this. Aircastle and AerCap are the winners but all four deals were very significant and will be repeated no doubt by Air Lease and Avolon.

GPA
Without doubt the greatest story in airfinance. An amazingly successful, innovative company for many years that eventually failed. The failed IPO and work out led to the creation of Gecas and other leading lessors including Pembroke, RBS Aviation Capital, Avolon, and others. The turnaround that led to AerFi was also fantastically managed by Patrick Blaney and his team.

Ireland
As well as GPA the Irish government has supported aircraft finance amazingly. It is also home to the leading European Airfinance conference.

Chinese leasing companies
China will be to aircraft finance in the next 10 years what Japan was in the 1990s.

Export credit
Everyone likes to criticise export credit agencies in good markets. But they saved manufacturers in 1998, 2002 and 2009. Some very dedicated people who work hard.

Low costs
Just 10 years ago European airlines and IATA would often explain why low-costs could not work in Europe. Then they argued the same for Asia and Latin America. Low-cost airlines won.

Securitization
Now a dirty word but EETCs and operating lease securitizations have made a big difference. Like many I have left commercial aircraft finance before European EETCs became common.

 

New aircraft lessors, more export credit

In Aircraft export credit, Aircraft leasing on October 8, 2010 at 9:27 am

In late 2008 during the discussions about the funding gap, bankers kept reminding everyone that lessors did not count as a funding source in their own right as they still needed debt.

While manufacturers are delighted to get orders from the new commercial aircraft leasing companies it is worth remembering that they will need debt to finance them. Although banks are lending to leasing companies anyone placing orders now is also trying to get export credit approval for their deliveries. 

This is not new, ILFC closed a $4 billion export credit deal in 1998, but it does mean that export credit volumes may continue to be higher than normal for the next few years.

ECGD bonds coming

In Aircraft export credit on October 16, 2009 at 2:05 pm

It looks like Goldman Sachs and Calyon are working with the UK’s Export Credit Guarantees Department (ECGD) to issue a aircraft bond similar to Emirate’s Ex-Im bond.
 
ECGD is the only European able to gurantee bonds.  So although this is good for Airbus customers (and Airbus) it won’t be able to issue anything like as much as Ex-Im bonds.

Banks offering aircraft Ex-Im or export credit loans

In Aircraft export credit on September 20, 2009 at 8:43 pm

Three years ago, banks were moving out of this market and there were a handfull of lenders that thought export credit made sense.

The increased competition (and changes like the Ex-Im put option) have brought pricing down significantly. Airlines can now get Ex-Im debt at around Libor plus 60bpss, with European export credit between 60bps and 80bps.

The following banks are all bidding for deals:

  1. Barclays
  2. BayernLB
  3. BNP Paribas
  4. Calyon
  5. Citi
  6. Deutsche Bank
  7. JPMorgan
  8. Natixis Transport Finance
  9. SMBC
  10. Toronto Dominion (TD Securities)

I think I am missing a couple of German banks and will update. If any airline wants contacts at any banks on the list please ask and I am happy to email them.

Aircraft export credit back in fashion

In Aircraft export credit on September 5, 2009 at 9:29 pm

It is no surprise that staff at the main export credit agencies have never been so busy. The big shock is how many banks are now competing to lend on these deals and how quickly pricing has come in.

Three years ago it looked like the market was going to be completely dominated by four banks led by ABN Amro (whatever happened to them?!). Other banks without cheap funding (typically through conduits) could not compete.

Now everyone seems to be offering export credit. Earlier in the year US Ex-Im put down a marker when it funded loans for airlines after they were offered debt at over Libor + 150 bips. Now – just six months later – European deals are closer to 85bps and Ex-Im guaranteed debt is around Libor plus 50bps.

There is a race between Goldman/Calyon and Citi to be the first to issue Ex-Im guaranteed aircraft bonds – or EGABs.

One European bank is also working on an exciting solution for Airbus export credit deals which should be available in a few months (more to come).

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