The Pimco-AerCap joint venture (JV) Gilead Aviation has marketed its $600 million aircraft asset backed securities (ABS), Ghost 2025-1. The transaction marks AerCap's sixth serviced aviation ABS.
The transaction consists of class A and class B tranches.
The class A $520 million notes have a maturity date of March 2050 and an anticipated repayment date of March 2032. The notes have an initial loan to value (LTV) ratio of 68.5%. Fitch and KBRA expect to give an A rating on the notes.
The class B $80 million notes have a maturity date of March 2050 and an anticipated repayment date of March 2032. The notes have an initial LTV ratio of 79.0%.
Proceeds from both tranches will be used to acquire a portfolio of 18 assets — consisting of 16 narrowbody aircraft and two widebody aircraft on lease to nine lessees located in eight jurisdictions. As of December 31, 2024, the weighted average age of the portfolio is around 4.4 years and the remaining term of the initial lease contracts is around 8.2 years. The portfolio has an initial value of around $759.4 million.
The portfolio consists of a majority of new technology aircraft — 92.3% by value. The new technology aircraft include three A320-200N, three A220-300, two A321-200neo, two 737 MAX 9, two 737 MAX 8, one A350-900, one A330-900, and one A321-200N. The other aircraft include one A320-200 and two 737-800.
The weighted average age of the new technology aircraft is around 3.6 years and the remaining lease terms is 8.3 years, which extends beyond the anticipated repayment date.
One aircraft in the portfolio, as of the end of 2024, had outstanding deferrals. “KBRA considered this risk in its analysis and did not give credit to previously deferred lease payments in the cash flow analysis," the report said.
The top three lessees represent 54.5% of the portfolio by value, which includes IndiGo at 27.8%, Finnair at 14.2% and Breeze at 12.5%. The top three countries represent 59.5% of the transaction, including India at 27.8%, the US at 17.5%, and Finland at 14.2%.
The transaction features a minimum number of assets test where if the issuers do not own at least seven assets, the transaction will begin to use any excess cash to fully pay down the notes. In addition, the transaction includes a debt-service coverage ratio (DSCR) triggers, a DSCR test, a security deposit of approximately $3 million at closing, and a liquidity facility sized to the greater of nine months of interest due on the A notes as well as the B notes.
The transaction has a 13.25-year mortgage-style amortization profile, which “roughly equates to approximately a 16-year straight-line amortization profile”, KBRA said in its report.
“This is roughly comparable to other transactions with aircraft portfolios of a similar age, which generally have 16 or 17-year straight-line amortization profiles,” KBRA added.
Lead structuring agent and joint lead bookrunner is Mizuho Securities and co-structuring agent and joint lead bookrunner is MUFG Securities America. UMB Bank, National Association acted as trustee. Credit Agricole Corporate and Investment Bank (CIB) acted as liquidity facility provider. Joint leads were Citigroup, Credit Agricole CIB, Mitsubishi UFJ Financial Group, RBC Capital Markets, Societe Generale, and Truist Bank.