Burnham Sterling, a financial advisory firm specializing in transportation assets, has acted as lead arranger and sole book runner in a privately placed transaction for Avianca for three aircraft, including two Airbus A320 family and one Boeing 787. The transaction utilized the Enhanced Aviation Investment Vehicle (EAIV) private debt structure developed by Burnham Sterling. It was Burnham Sterling’s first multi-currency EAIV providing both U.S. Dollar and Euro funding for Avianca. It also provided Avianca with attractive mezzanine funding, achieving loan-to-values as high as 95% of the appraised value. The transaction has a financing term as long as 12-years, and the last of the three aircraft was delivered in December 2016.
“This is Avianca’s third successful transaction using Burnham Sterling’s EAIV structure,” said Lucia Avila, Fleet Finance Director of Avianca. “We thoroughly evaluated and tested EAIV against competing products and execution alternatives and found EAIV raises nearly as much cash as operating lease financing but with an all-in IRR that is below the IRR of an operating lease. We are thrilled with the pricing, terms and simplicity achieved by Burnham Sterling through EAIV. We were especially impressed with our new multi-currency financing that Burnham Sterling developed and the new investor relationships we achieved.”
“Euro interest rates are at historic lows and we are proud to provide access to these low rates without the need for any supplemental collateral or mark-to-market provision imposed on Avianca,” said Michael Dickey Morgan, Executive Managing Director at Burnham Sterling. “Our EAIV structure allowed Avianca to access the Japanese market in a debt financing for the first time.”
Burnham Sterling structured and placed the transaction with four institutional investors in Europe and Asia. Burnham Sterling and its affiliates have now financed fourteen new narrow-body and wide-body aircraft for Avianca.