British Airways, subsidiary of International Airline Group (IAG) has launched a $929 million inaugural Enhanced Equipment Trust Certificates (EETC). Citi is acting as Lead Structuring Agent, Global Coordinator and Lead Bookrunner. Other book runners are: HSBC, Deutsche Bank and Morgan Stanley. Helaba will act as Depositary Bank during the delivery period as well as initial Liquidity Facility Provider. This is the first EETC to incorporate JOLCO tax equity.
The $721.610 million Class A Certificates priced at 4.625% and were rated Baa1 by Moody’s, A by Standard & Poor’s and A by Fitch. The tranche has an 11.0-year tenor, 7.9-year weighted average life (WAL), 55.2% initial/max LTV.
The $205.372 million Class B Certificates priced at 5.625% and were rated Ba1/BBB/BBB-. They have a 7.0-year tenor, 4.2-year WAL, 70.6% initial/max LTV
The EETC is secured by 14 new delivery aircraft, including six Airbus A320-200s, two Boeing 777-300ERs, and six Boeing 787-8s.
The non-US EETC transaction structure benefits from the favourable provisions afforded to creditors under English contract law, an 18-month interest Liquidity Facility on the Class A and Class B Certificates, and full cross-default and cross-collateralization provisions. The deal launched after a week of non-deal investor meetings/calls in Europe, the US, and Asia. IAG believes that an EETC program will be a key component of British Airways’ capex financing strategy.
Meanwhile, Doric has launched its second EETC – Series 2013-1 – via Doric Nimrod Air Finance Alpha (DNA Alpha) secured on four new Airbus A380 aircraft on lease to Emirates, which will be delivered this year.
Moody's has assigned A3 and Baa3 ratings, respectively, to the Class A and Class B Pass Through Certificates, Series 2013-1 (the "Certificates") of the 2013-1 Pass Through Trusts that DNA Alpha Limited ("DNA Alpha") will establish. The outlook is stable.
Credit Agricole, acting via its New York Branch, will provide the separate committed liquidity facilities sized to meet the next four semi-annual interest payments due on each of the A and B tranche Certificates following a Certificate default.
Both deals will be examined in detail in the forthcoming issue of Airline Economics along with substantial aircraft and airline financings deals as well as all the main news stories affecting the broader aviation industry. For a small annual subscription fee of £149 (UK, EMEA/US/Canada)/ £189 (Rest of the world), Airline Economics offers a comprehensive view of your industry. Please contact Michelle Jones for subscription information on michelle@aviationnews-online.com or subscribe today at: www.aviationnews-online.com/subscriptions