Carlyle adds second tranche to AASET 2024-1

Carlyle Aviation has added another tranche to its asset backed securitisation (ABS) transaction AASET 2024-1. The Class A-2 notes are the second issuance from this transaction. The AASET 2024-1 represents Carlyle's fifteenth iteration of its AASET series. On June 17, 2024, Carlyle closed the $428.051 million AASET 2024-1 Class A-1 notes tranche. The Carlyle Aviation team is reported to have been pleased with the reception to the single tranche deal, adding a second tranche. The Class A-1 notes had marked the reopening of the aviation ABS market after a more than two year hiatus. The $321.195 million Class A-2 notes carry a coupon of 6.261% and 205 basis point spread to US Treasuries, with an loan-to-value (LTV) ratio of 69%. The notes have a final maturity date of May 2049. The repayment date is anticipated to be May 2031. KBRA affirmed its A rating from the Class A-1 notes with the issuance of the Class A-2 notes. The Class A-2 notes are to be secured on a portfolio of eight additional aircraft to be acquired within 270 days following the closing date. With the Class A-1 notes to be secured on a portfolio of 12 aircraft, the cumulative 20 aircraft comprise of 17 narrowbody aircraft and three widebody aircraft on lease to 14 lessees located in 12 jurisdictions. AASET 2024-1 Class A-1 notes comprised of $428.051 million with a loan-to-value ratio of 65%, a final maturity date of May 2049, and an anticipated repayment date of May 2031. The A-1 tranche was offered at par with a 6.26% coupon and 205 basis point spread to US Treasuries. Goldman Sachs was sole structuring agent, global coordinator and joint lead bookrunner. Phoenix American was the managing agent, with mba as the maintenance provider. Appraisers are Avitas, Collateral Verification and mba. Milbank was the issuer counsel The portfolio consists of four A321-200NX, two 737 MAX 8s, two A320-200neo, one A321-200 and one A320-200, as well as one A330-900 and one A350-900. The weighted average remaining term of the initial lease contracts is approximately 9 years. The portfolio has an initial value of approximately $1.1bn based on the average of the half-life base values. The structure includes a nine month liquidity facility provided by Natixis. There are a few issues highlighted with the aircraft portfolio – one lessee SAS remains in bankruptcy protection, while two lessees have outstanding deferral payments.  One aircraft – the MAX 8 has not yet been delivered by Boeing, three aircraft are not yet owned by the servicer and two aircraft have PW1100 engines. However, the latter aircraft with the GTF engines have not been subject to recall, according to the KBRA pre-sale document. “We are pleased with the outcome of this transaction, which marks Carlyle Aviation Partners’ tenth year accessing the ABS markets and signals the re-opening of the aircraft ABS market after two years of inactivity,” said William Hoffman, chairman and co-founder of Carlyle Aviation Partners. Javier Meireles, chief financial and operating officer of Carlyle Aviation, noted that the company’s “strong brand and track-record in the space contributed to the transaction’s success”.