Castlelake is in the market with its third aircraft asset backed securitisation (ABS). The $916 million Castlelake Aircraft Securitization Trust 2016-1 (CLAS 2016-1) is a three-tranched ABS secured on a portfolio of 52 aircraft and one engine with an initial weighted average age of approximately 12.1 years.
The $715 million of class A loans have an initial loan-to-value ratio of 64% and are rated A by Kroll Bond Ratings Agency, while the BBB-rated B loans total $130 million with an LTV of 75.7%. The BB-rated $71 million C loans have an LTV of 82%. All classes of loans have a final maturity date of August 2041.
The class a loans and class b loans amortize on a 12-year straight-line schedule. Commencing in the sixth year of the transaction, a cash sweep equal to 50% of all remaining available collections will accelerate the repayment of the A and B loans, sequentially. The cash sweep will increase to 75% in the seventh year and 100% in the eighth year and thereafter of the transaction.
If the class A and B loans remain outstanding after the seventh anniversary of the closing date, a rapid amortization event shall occur, resulting in a 100% cash sweep to fully repay the A loans and then the B loans in sequential order.
The class C loans amortize on a five-year straight-line schedule during the first two years. Beginning in the third year of the transaction, the class C loans amortize on a seven-year straight-line schedule. Commencing in the fourth year of the transaction, a cash sweep equal to 30% of all remaining available collections will accelerate the repayment of the C loans. The cash sweep will increase to 100% in the eighth year and thereafter of the transaction.
Castlelake is acting as the sole servicer for the portfolio. The transaction is being led by joint structuring agents Deutsche Bank and Goldman Sachs. Phoenix American Financial services is the managing agent, with Wells Fargo acting as the trustee and facility agent. DVB is providing the nine month liquidity facility.
The aircraft and engine in the portfolio are initially leased to 20 lessees located in 17 countries with an initial total value of approximately $1,116.9 million. The portfolio comprises 11 737-800s, 10 A320-200s, eight CRJ900s, eight A319s, seven A321-200s, four A330-200s, two 737-700s, one 747-400F, one 757-200 and one CFM56-7B22.
The three largest lessees by value are Qatar Airways, Alitalia and United Airlines, which represent approximately 55.4% of the portfolio. In addition, the concentration limits permit 65% of the portfolio to be comprised of the three largest lessees. The three largest lessees in CLAS 2016-1 represent a greater initial percentage of the Portfolio relative to Castlelake’s prior transactions. Furthermore, the increase in the concentration limit to 65% of the Portfolio for the three largest lessees is higher than a majority of recent aircraft securitizations. Similarly, the three largest countries by value are Qatar, the United States and Italy, which represent approximately 67.6% of the Portfolio.
This transaction, which represents the third securitization for Castlelake, is in the market now and will price early next week when we will provide an update on its progress.
