Aviation financing platform Ashland Place Finance has marketed its second aviation asset-backed securitisation (ABS) deal, known as APL Finance 2025-1.
The $414.4 million transaction consists of four tranches and will be used to acquire 11 loan facilities. It is secured by 26 assets.
The assets include 13 narrowbody aircraft — including four E195-E2 jets — eight freighters, two widebodies, and three engines.
All four tranches are expected to be rated by KBRA and have a legal final maturity date of March 2036.
The $295.9 million A tranche is expected to be rated AA by KBRA and has an initial loan to value (LTV) ratio based on loan balance of 67.5%, as well as an LTV ratio based on collateral balance of 45.7%.
KBRA expects to give APL Finance 2025-1’s $56.1 million B tranche an A rating. The tranche’s LTV based on loan balance is 80.3% and its LTV based on collateral balance is 54.4%.
The $32.3 million C tranche has an LTV ratio of 87.6% based on loan balance and 59.4% based on collateral balance. The tranche is expected to be rated BBB by KBRA.
The final D tranche totals $30.2 million, with an LTV based on loan balance on 94.5% and 64% based on collateral balance. KBRA expects to rate the tranche BB-.
The E195-E2s make up 26% of the portfolio by value, followed by the A320-200 at 19.8%, A330-900neo at 12.6%, and the A321-200 at 10.1%.
Other assets include 737-800 freighters (both SF and BCF variants), a 747-400 freighter, an A321-200 freighter, as well as an A330-200 and a 737-800 aircraft. In addition, the portfolio’s engines include CFM56-7B and CFM56-5B assets.
Citi is acting as sole structuring agent on the transaction and UMB Bank is acting as servicer and trustee.
The transaction’s structural features include protections such as subordination of junior notes, triggers that accelerate repayment if losses exceed 5% or if the pool falls below eight assets. The transaction structure includes a required overcollateralisation and a reserve account.
Ashland Place issued its inaugural ABS deal in 2023, known as APL Finance 2023-1. The $324.3 million securitisation included four tranches, with A through C being rated by KBRA.
The deal was oversubscribed and it was reported at the time that investors new to the asset class had bought into the deal.
KBRA noted that key changes between the 2023 and 2025 issuance include a reduction in supplemental principal from 10% to 5.5%, and a lower required overcollateralisation target of 5.5%, down from 9.05%.
Additionally, the 2025 transaction introduces a single unfunded commitment that is equal to 6.5% of the loan balance, with this expected to be closed before the transaction’s close. APL 2025-1 will close sometime in October.