Carlyle Aviation Partners has priced its $518.3 million fixed rate aircraft asset backed securities (ABS) issuance — the first commercial aircraft ABS of the year. The issuance is split into two tranches: the A-1 notes and the B-1 notes.
The A-1 notes are priced at $464.45 million with a coupon of 5.943% and a spread of US Treasuries plus 170 basis points. The tranche has a loan-to-value (LTV) ratio of 69%.
The B-1 notes are priced at $53.85 million with a coupon of 6.576% and a spread of US Treasuries plus 235 basis points. The tranche has an LTV ratio of 77%.
Both tranches have a weighted average life (WAL) of 4.71 years and an expected maturity of seven years. The transaction had an initial appraised value of $673 million.
Proceeds will be used to acquire a portfolio of 23 assets, consisting of 21 narrowbody aircraft and two widebody aircraft — 85% narrowbody and 15% widebody — on lease to 17 lessees in 13 countries. In addition, the proceeds will fund the initial expense and maintenance reserve accounts, and pay transaction fees and expenses related to the offering.
The portfolio has a weighted average lease rate factor (LRF) of 1.0%. The portfolio has a weighted average age of 8.8 years and consists of 27% new technology aircraft. The remaining weighted average lease term of 5.3 years. The top five lessees include Wizz Air with 14%, Transavia France with 11%, along with Air Cairo, Iberia and Lion Air each holding 8%.
The A-1 notes are expected to be rated Asf from Fitch and A (sf) from KBRA and the B-1 notes are expected to be rated A-sf from Fitch.
Goldman Sachs acted as structuring lead. Joint leads were BNP Paribas, Citi, Fifth Third Securities, Natixis, RBC Capital Markets, SMBC, and Societe Generale.
In addition, Carlyle Aviation Partners has appointed Javier Meireles to the newly created role of chief executive office, effective immediately. Meireles previously served as the company's chief operating officer and chief financial officer and has been with the company for over a decade. Meireles joined Carlyle in 2010 from PwC where he was audit manager and worked with the company for seven years. He supported his clients with public debt offerings, SEC comment letters, and technical accounting matters.
In addition, the company's chief commercial officer Alex Rasnavad has been appointed president. Rasnavad joined the company in 2021 from DAE Capital where had served as chief strategy officer where he led the firm's overall portfolio strategy, aircraft trading and OEM activity, as well as its aircraft ABS transactions.
Cofounders Robert Korn and Bill Hoffman will continue to remain active in the company, with Hoffman as chairman and and Korn as vice chairman.
“We will continue to remain involved with the business and are both delighted to support Javier, Alex, and the rest of the leadership team with the firm's continued growth,” Korn and Hoffman said in a joint internal memo. “We have a clear mission to deliver strong returns to our investors through our broad range of financing solutions for our airline customers, and that does not change.”
As of September last year, the company had $12.1bn assets under management and had 369 owned or managed aircraft. In 2023, the company had purchased $786 million worth of aircraft.