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AASET 2022-1 revitalises aviation ABS market

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AASET 2022-1 revitalises aviation ABS market

Carlyle Aviation Management has priced its latest aviation asset-backed securitisation transaction under the AASET (Apollo Aviation Securitization Equity Trust) moniker with a single-tranche $522.4 million deal, which builds in several structural post-COVID precautions. The A rated A notes have a weighted average life of 4.61 years with a loan-to-value ratio of 67%, which priced at a 6$ coupon and yield of 6.558%.

The precautions include a caveat that the issuer must own at least eight aircraft at the end of the delivery period, otherwise the transaction will begin to use any excess cash to pay down the notes after the schedule principal is applied. There is also a collections test. AASET 2022-1 also has a higher disposition paydown amount. Should an aircraft be sold in the course of the deal, 110% of the series amount which is available to be allocated for a pay down will be used to pay down the notes, KBRA said. Typically, in aircraft ABS deals that percentage is 105%.

Goldman Sachs is the sole structuring agent, global coordinator, and joint lead bookrunner. Joint bookrunners are BNP Paribas, Natixis and RBC. Carlyle Aviation will service the notes. Some 12 leases on 25 aircraft will secure the transaction, which are leased to domestic carriers, and one widebody aircraft on lease to Air Canada. The aircraft portfolio has an average remaining lease term of 4.3 years with a value of $779.8 million based on the average of the half-life base values from various appraisers.

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