Kroll Bond Rating Agency (KBRA) has upgraded the rating of Falko’s Regional 2021-1 asset-backed securitisation (ABS) Series A loans from BBB+ to A-.
In April 2021, Falko closed its inaugural aviation ABS transaction issuing $255 million of Series A loans, the first ABS transaction completed since the COVID-19 pandemic which is exclusively secured by regional aircraft assets. At closing, the portfolio comprised of 39 assets, 25 regional jet aircraft and 14 turboprop aircraft on lease to nine lessees, increasing to 11 lessees across nine countries as of March 2023.
KBRA states that “the upgrade of the Series A loans is owed to the collateral performance and overall performance of the transaction. Since closing, the Series A loans have received all scheduled interest and principal payments”.
KBRA has downgraded securities from over 50 aviation ABS transactions owing to performance issues resulting from COVID-19 related industry disruption and the Russia/Ukraine conflict; however, Falko reports that no securities in Regional 2021-1 have been downgraded post issuance.
Meanwhile, Falko closed a $388.2 million term loan financing in the first quarter of this year.
Falko said the financing was secured by a portfolio "of up to 41 aircraft" owned by the Falko Regional Aircraft Opportunities Fund II, but provided no further details.
Citi, Deutsche Bank and Goldman Sachs acted as co-structuring agents and mandated lead arrangers. Allen & Overy acted as legal advisor to Falko with Milbank as legal advisor for the Lenders. UMB is the managing agent and security trustee.