Carlyle issues first commercial aircraft ABS of 2025

Carlyle Aviation Partners has issued the first commercial aircraft asset backed securities (ABS) of 2025 with the $518.3 million AASET 2025-1 on January 27, 2025.

The issuance is split into two tranches: series A-1 notes and series B-1 notes. Proceeds will be used to acquire a portfolio of 23 assets, consisting of 21 narrowbody aircraft and two widebody aircraft on lease to 17 lessees in 13 jurisdictions. In addition, the proceeds will fund the initial expense and maintenance reserve accounts, and pay transaction fees and expenses related to the offering.  

As of January 15, 2025, the weighted average of the portfolio is around 8.8 years, while the weighted average remaining term of the initial lease contracts is approximately 5.3 years. According to KBRA, the portfolio has an initial value of approximately $673.1 million, according to Fitch. 

Fitch Ratings assigned an expected rating of Asf on the A-1 notes and an expected rating of A-sf on the B-1 notes. 

Around 85% of the portfolio's pool value is comprised of tier 1 narrowbody aircraft, said the ratings agency. “Fitch considers the pool to consist of liquid aircraft with large user bases,” it said. The other 15% of the pool includes two A330-300s, which Fitch considers a tier 2 asset. 

Fitch said the weighted average aircraft age is “acceptable” and the distribution of ages is “quite broad” with the youngest aircraft being less than one year old, and the oldest at around 16.6 years. The portfolio includes 13 mid-life aircraft, with seven aircraft under seven years old and three that over 14 years old. The pool includes three A320neos and one A321neo aircraft. 

“The pool is diversified both geographically and in terms of the effective count of aircraft in the pool,” said Fitch. Europe has the highest share at around 30.8%, following by Asia Pacific at 20.9% and then North America with 12.7%. The other regions make up the remaining 35.6% share. 

Carlyle Aviation Management will be responsible for managing the aircraft, including aircraft leasing, maintenance and disposition. 

Goldman Sachs acted as structuring lead. Joint leads were BNP Paribas, Citi, Fifth Third Securities, Natixis, RBC Capital Markets, SMBC, and Societe Generale.