Castlelake has marketed its third aviation asset-backed securitisation (ABS) of 2025, CLAS 2025-3.
The $758.56 million transaction consists of A through C notes. The tranches have an anticipated repayment date of November 2032 and legal final maturity date of November 2050.
The $639.75 million A notes are expected to be rated A by KBRA and Fitch. The initial loan-to-value (LTV) ratio for the tranche is 70%, according to a KBRA report.
The subordinated $82.25 million B notes and $36.56 million C notes have an initial LTV ratio of 79% and 83%, respectively. The B tranche is expected to be rated BBB by KBRA and BBB+ by Fitch, while the C notes are expected to receive BB from KBRA and BB+ from Fitch.
Proceeds from the notes will be used to acquire a portfolio of 29 assets, including 26 narrowbodies and three widebodies. The portfolio is on lease to 23 lessees in 19 jurisdictions.
As of August 31, 2025, the weighted average age of the portfolio is around 11.7 years and the weighted average remaining term of the initial lease contracts is around 4.5 years.
The portfolio includes five new-technology aircraft, making up 28.6% of the portfolio by value. These include two 787-8s, two A321neos, and one A320neo. The weighted average age of these aircraft is around 7.5 years, and the remaining lease term is around 6.5 years.
According to KBRA, one A321neo aircraft is parked awaiting engines and is expected to be in service before summer 2026. The lessee is still required to continue paying lease rentals as part of the triple-net leases in place. This requires lease payments regardless of aircraft or engine operational status.
Other assets in the portfolio include 13 A320-200s, 10 737-800s, and one A330-200.
The top three lessees represent a quarter of the portfolio by value: the top lessee is VivaAerobus (10%), followed by Qantas (7.6%), and Cebu Pacific (7.4%).
The top three jurisdictions are Mexico, US, and Indonesia at 17.4%, 13.3%, and 8.2%, respectively.
KBRA’s report noted that no lessee in the initial portfolio was in bankruptcy, over 30 days late on lease payments, or has outstanding deferral amounts.
The transaction’s structure includes a $1 million security deposit, which will be funded at closing and a liquidity facility sized to nine-months of interest due on the Class A notes.
Beginning in year six of the deal, the transaction will include partial cash sweeps for the Class A notes and B notes in which excess cash will be used to repay the outstanding balance of the notes.
The transaction will begin to pay down the notes with any excess cash if the issuers do not own at least eight assets.
Deutsche Bank is lead structuring agent and lead left bookrunner on the transaction. UMB Bank is the security trustee and Natixis’ New York branch is the liquidity facility provider.
The transaction represents Castlelake’s 15th aviation ABS – seven of which have been fully repaid.