Leasing companies continue to raise capital as the market turns to bolster funds for acquisitions and growth but also to ensure strong capital flows.
Aviation Capital Group (ACG) announced that it has received an additional $200 million investment from its minority shareholder, Tokyo Century Corporation.
Tokyo Century has held an investment in ACG since December 2017. With this additional investment, Tokyo Century’s ownership in ACG increases to 24.5%. Pacific Life retains its controlling interest in ACG.
“We are excited about Tokyo Century’s additional $200 million investment in ACG in the form of primary equity capital, which demonstrates its continuing support for ACG and is only a portion of Tokyo Century’s capital commitment available for ACG to access,” said Khanh T. Tran, president and CEO of ACG. “This incremental capital infusion, combined with ACG’s debt capacity, positions ACG for opportunistic growth in 2019.”
“Since our initial investment, Tokyo Century has continued to be impressed with ACG’s demonstration of its strong capabilities and is delighted to make this additional equity contribution to support ACG’s growth strategies,” said Koichi Nakajima, Deputy President and Executive Officer of Tokyo Century.
Meanwhile, mid-life lessor, Aero Capital Solutions, has closed on its first aviation investment vehicle with total aggregate equity commitments of $200 million. The lessor notes that investors include a broad group of sophisticated investors, registered investment advisers, and single and multi-family offices. In addition to the $200 million of equity, ACS closed on a $400 million debt facility with a multinational investment bank providing a total of approximately $600 million of capital for deployment.
“We were pleased to see the strong demand for our first offering from such a sophisticated and diverse group of investors,” said Adam Davidson, ACS’ EVP of Business Development. “Raising our first investment vehicle will allow us to continue building on our successful track record of acquiring and monetising mid-life commercial aircraft.”
As of its final close on December 31, 2018, the vehicle was approximately 50% deployed, comprised of 21 commercial aircraft. The current portfolio includes a mix of mid-life Boeing and Airbus aircraft on lease to a diversified group of airlines.
“Although we continue to operate in a competitive market, our integrated platform and extensive in-house capabilities, enable ACS to continue to extract incremental value from midlife aircraft assets,” said Jason Barany, ACS’ CEO & CIO.
Vedder Price served as legal counsel to ACS.