Macquarie Asset Management, PGGM Infrastructure Fund and Australian Retirement Trust (ART) are supporting Macquarie AirFinance's $2.2bn acquisition of an aircraft portfolio from ALAFCO Aviation Lease and Finance Company (ALAFCO).
Macquarie AirFinance shareholders will collectively contribute up to $600 million of new equity to the business to facilitate its purchase of 53 current and next-generation commercial passenger aircraft and an order for 20 Boeing 737 MAX aircraft from ALAFCO. The transaction will be supported with a $1.65 billion acquisition facility, underwritten by BNP Paribas, Citibank, MUFG Bank, and Natixis.
Jonathan Watkinson-Hall, Head of Asset Finance at Macquarie Asset Management, said: “This strategic acquisition will enable Macquarie AirFinance to grow its network of customers globally while increasing its exposure to more efficient aircraft. As passengers return to the skies and investor appetite for transportation assets strengthens, we are excited to support Macquarie AirFinance as it acquires this attractive portfolio and positions for future growth.”
Dennis van Alphen, Head of Infrastructure Investments at PGGM, said: “With this investment, PGGM Infrastructure Fund follows through on its commitment made at the time of becoming a shareholder in Macquarie AirFinance in 2019 to finance the acquisition of young aircraft and to provide an attractive risk-return to our clients. In the next decades, the global aviation industry will demand aircraft with an increasingly lower carbon footprint as the industry works towards its 2050 net zero target, as formulated by IATA member airlines in 2021. In that context, PGGM Infrastructure Fund will expect all of its investee companies to develop a credible long-term CO2 reduction strategy before 2030 to align themselves with the Paris Climate Agreement, so they meet our client PFZW’s climate ambition.’’
Michael Weaver, Head of Global Real Assets at ART, said: “ART is pleased to increase its investment. The diversification of Macquarie AirFinance’s fleet into more efficient and lower emissions aircraft is consistent with our broader strategies to lower net emissions across our portfolio, while never compromising on our members’ best financial interests. Our partnership with Macquarie and PGGM in Macquarie AirFinance continues to provide ART’s members an attractive investment into a unique asset with diversification benefits across our portfolio.”
The transaction was approved by ALAFCO shareholders at an Ordinary General Assembly Meeting on 27 December 2022 with completion expected this year, following the satisfaction of customary closing conditions.
This transaction will enable Macquarie AirFinance to further expand and diversify its fleet of aircraft while improving the emissions profile, scale, average age, remaining lease term, and orderbook size as the recovery of the aviation sector gains pace.