Amedeo Air Four Plus, a newly-formed aircraft acquisition and leasing investment company, was today listed on the London Stock Exchange. The new company intends to acquire initial aircraft assets of approximately US$1.1 billion, increasing by up to an additional $600 million by year-end 2015, with the scope to acquire further assets in the future.
Amedeo Air Four Plus will buy initially four A380s, which are or will be on lease to Emirates. Two aircraft were delivered to Emirates last year as part of a sale and leaseback transaction with Amedeo. The next two A380s will be acquired in the second half of this year, with deliveries understood to be scheduled for August and November 2015. The company has confirmed that it may further expand its pool of assets later in 2015.
The company has raised £202 million in equity and £800 million in commercial loan facilities, provided by a bank syndicate led by Westpac and Qatar National Bank.
Amedeo holds a strategic co-investment of 5% of the company's share capital and acts as its long-term asset manager.
The company, which will not be consolidated by Amedeo, offers institutional investors exposure to a listed, long-term aircraft acquisition, financing and leasing investment. The target aircraft acquisitions will be sourced by Amedeo, although the company has an independent Board of Directors, themselves carrying extensive aviation industry experience, which will review and authorize all future aircraft purchases and lease decisions.
“The company will enhance our ability to execute transactions in the capital-intensive, large widebody aircraft space and will allow us to deploy additional capital, alongside our own, for our ordered A380 aircraft, manage any new customer concentrations within our portfolio, and expand the scope of our activities to support both new aircraft acquisitions and, in time, potential secondary market opportunities,” said Mark Lapidus, CEO of Amedeo.
Nimrod Capital, Amedeo’s partner in the UK institutional and discretionary investor market, acted as the company's Placing Agent and will be the long-term Corporate and Shareholder Adviser.
“Income generating investments backed by A380 aircraft and an outstanding lessee like Emirates are proving very interesting to investors in the current low yield environment. We are delighted to be able to partner up with the Amedeo team again to bring this attractive investment opportunity to UK institutional investors and we look forward to growing the Company in both scope and scale in the years ahead,” commented Marc Gordon, Partner at Nimrod Capital.
Amedeo Air Four Plus successfully completed its IPO with 202,000,000 shares of the company at an issue price of 100p per share now trading on the Specialist Fund Market (SFM) of the London Stock Exchange. The company is targeting a net annualised return of 11.1% over 12 years.
Herbert Smith Freehills acted as legal advisers to the company on the placing and admission to the LSE, Milbank, Tweed, Hadley & McCloy advised the Board of Directors and Norton Rose Fullbright acted on behalf of Amedeo.
The finance agreements
The First Tranche Finance Agreements for the two aircraft are $190 million each which comprise of a senior loan of approximately $155million (which is expected to have amortised to approximately $150 million by the date of acquisition of each of the First Tranche Assets) and a junior loan of approximately $35 million.
The First Tranche Finance Agreements were entered into by the Current Owners at the time of purchasing the First Tranche Assets.
Each loan will consist of a senior loan which will be fully amortised with quarterly repayments in arrears over 12 years and a junior loan which will be interest only for 12 years requiring repayment of principal at the end of 12 years.
Each Loan is expected to have a committed term of 12 years from the drawdown date of the Loan. The Loans in respect of the First Tranche Assets were drawn down on 4 September 2014, with respect to the First Asset, and 30 October 2014 with respect to the Second Asset.
Each Senior Loan is amortised with repayments every Quarterly Period in arrear over 12 years in amounts confirmed by the Company and the relevant Lenders at the point of acquisition in the case of the First Tranche Assets or prior to the drawdown of the loan for the Second Tranche Assets.
Each Junior Loan shall be repaid in full at the end of the 12 year lease term which, with respect to the First Asset, is 4 September 2026 and, with respect to the Second Asset, 3 November 2026.
Interest on the Loans will be payable every Quarterly Period in arrear and will accrue at the fixed rate of interest confirmed by the Company and the relevant Lenders at the date of acquisition. If any amount is not paid by the Company when due under the Loan Transaction Documents (as defined below), interest will accrue on such amount at the then current rate of the Loan plus 2.50% per annum (in the case of the Loans for the First and Second Assets) and a rate to be agreed for the Third and Fourth Assets.
In relation to the loans, Amedeo Air Four Plus also states that it “may consider alternative means of debt financing, if in the view of the Board such alternative debt financing will not have a material adverse effect on the Company's target income returns”.
The Company’s website is www.aa4plus.com.