Carlyle Aviation Partners has priced its aviation asset backed securities (ABS) AASET 2025-2 under its master trust transaction AASET MT-1.
The deal is Carlyle’s 18th serviced aviation ABS deal and its second issuance under AASET MT-1, following the closing of AASET 2025-1 in early February of this year.
The current transaction comprises of two tranches totalling $525.7 million: the A-2 and B-2 notes. The issuance builds on from the Series 2025-1 issuance of A-1 and B-1 notes, which totalled $518 million. The tranches have a repayment date of June 2032, and legal maturity date of February 2050.
The $447.7 million A-2 notes have an initial loan to value (LTV) ratio of 69%. The tranche has a coupon of 5.522% and a spread of US Treasuries plus 160 basis points. The tranche has a weighted average life (WAL) of 4.67 years and was rated by A by both Fitch and KBRA.
The $78 million B-2 notes have an initial loan to value (LTV) ratio of 79%. The tranche has a coupon of 6.010% and a spread of US Treasuries plus 210 basis points. The tranche has a WAL of 4.65 years and was rated A by Fitch Ratings, while KBRA has not given it a rating.
The first issuance under its master trust transaction included $464.45 million A-1 notes with a 5.943% coupon and spread of US Treasuries plus 170 basis points, with a LTV ratio of 69%. The $53.85 million B-1 notes had a coupon of 6.576% and a spread of US Treasuries plus 235 basis points, with a LTV ratio of 77%.
In an exclusive interview with Airline Economics in February, the then-newly appointed CEO of the company Javier Meireles said the “novel” master trust structure was “probably the biggest structural nuance and change” introduced to aviation ABS transactions.
“It really is a differentiator of our issuance compared with some of the other issuances that the market has seen thus far – the master trust structure is not something that has historically been used in aviation ABS transactions,” explained Meireles at the time.
A master trust allows ABS issuers to issue more debt peri pesu with the initial debt, which can be used to purchase more aircraft. In essence, it functions like an accordion feature, tailored for aviation ABS transactions.
The issuance was further bolstered by its employment of a master trust structure, which Carlyle first introduced in June 2024 with its AASET 2024-1 issuance. In that transaction, the company had a pre-identified pool of eight aircraft, which the company completed with a subsequent notes issuance.
“The master trust structure in AASET 2025-1 is a bit broader,” said Meireles. “The issuance is for 23 aircraft, and we have the ability to issue further issuances from a pre-identified pool of more than 50 aircraft. There can be an additional one, two, or three issuances off of the back of this AASET 2025-1 deal.”
This current transaction will allow for the acquisition of 23 additional aircraft, which will be delivered within 270 days of the closing period. The additional aircraft bring the cumulative total for both transactions to 46 assets. AASET 2025-2 consists of 22 narrowbodies and one widebody aircraft. AASET 2025-1 consisted of 21 narrowbodies and two widebodies.
The 2025-2 additional aircraft consists of nine A320ceo, seven A320neo, two A321-200, one A330-300, three 737-300, and one 737-900ER aircraft.
Under both transactions, the top three lessees make up 30.6% of the portfolio, by value. Wizz Air is at the top with 12.5% of the value, Frontier second at 9.8% by value, and Viva Aerobus third with 8.4% of the value. However, for the latter, two of its three aircraft in the portfolio are on lease to another airline, which expire in May and July this year. Both aircraft are expected to be released to Viva Aerobus in September and November 2025.
The weighted average age of the 46 asset portfolio is 8.7 years, while the weighted average remaining lease term is 5.6 years. The portfolio includes 11 next generation or ‘new technology’ aircraft, or at 34.4% by value, including 10 A320neo and one A321neo aircraft.
Two liquidity facilities cover nine months of interest for the Series A-1 and A-2 notes, provided by Natixis and Societe Generale, respectively. A series B-1 interest reserve account was funded at the closing of AASET 2025-1 with six months of interest. A similar series B-2 reserve will be funded at the 2025-2 closing.
Goldman Sachs acted as sole structuring agent, global coordinator and lead left bookrunner. UMB Bank, National Association acted as trustees.