GECAS and Oz Management (Oz) have closed STARR 2018-1, which is the first aircraft portfolio purchase vehicle structure to include a dedicated asset manager – Start Ltd – for equity investors. In this transaction, GECAS is selling a portfolio of aircraft to Start Ltd, which is financing its acquisition through issuance of 144A debt and equity. GECAS will continue to service the portfolio and an affiliate of Oz will serve as an asset manager.
The diversified portfolio is comprised of 24 in-production Boeing and Airbus aircraft on lease to 16 global airlines in 15 countries, with a total appraised value of approximately $700 million.
An affiliate of Oz, through an exclusive, multi-year agreement with GECAS, will serve as an asset manager on this and potential future transactions, acting on behalf of the syndicated equity investors as an advisor to the board regarding portfolio matters. In this capacity, Oz will provide increased transparency on behalf of START Ltd. through enhanced investor reporting to improve liquidity for debt and equity investors.
Rob Shafir is the chief executive officer of Oz Management who has expressed his excitement in teaming up with GECAS to create this new structure to create this new structure that he says “will bring increased institutional capital to the commercial aviation space.”
“By joining with Oz on this transaction, we feel confident this unique structure will bolster investor interest in the aviation finance space,” said Alec Burger, President of GE Capital and President & CEO of GECAS. “While GECAS continues our lessee relationships through our servicing arrangement, this structure provides GECAS, as a seller, and buyer/issuers like START Ltd. with access to the institutional market on a more consistent basis. We look forward to teaming up with Oz on similar aircraft sales transactions going forward and capitalising on their expertise in managing these types of platforms.”
With nearly $1 trillion in outstanding market value in commercial aviation, this asset manager structure aims to broaden the investor base in the sector and bring increased institutional capital to the space, similar to other securitization markets such as CLOs. In addition to serving as the asset manager, funds managed by Oz have the added opportunity to invest equity.
Full details of the transaction plus an interview with GECAS and Oz will feature in the forthcoming issue of Airline Economics. Subscribe here today to ensure you don’t miss out.