PK AirFinance closes first aircraft loan ABS

PK AirFinance, Apollo Global Management's aviation lending platform, has closed its first loan asset-backed securitisation (ABS), PK ALIFT loan funding 3 Series 2024-1 (PKAIR 2024-1). PKAIR 2024-1 issued over $622 million of notes. The notes will be used to acquire the rights to a portfolio of aviation loans through a 100% series limited partnership interest in a PK-managed origination vehicle. ""PK is excited to close this strategically significant transaction which diversifies our financing sources and supports our integrated aviation platform’s demand for directly originated aviation assets,"" said Gary Rothschild, CEO of PK AirFinance. ""This transaction – supported by a AAA rating – is a testament to PK’s demonstrated track record within aviation finance, the strength and diversity of our collateral pool and our comprehensive servicing capabilities."" The loan marked the first commercial aircraft ABS issuance in 2024 and the first AAA-rated aviation ABS public issuance in over 20 years. PK said its portfolio asset quality, platform, and management team had driven the rating. PKAIR 2024-1 was rated by both KBRA and DBRS credit rating agencies. The company said the issuance was oversubscribed and saw broad capital market participants, including third-party insurers. The notes are secured by the proceeds of a portfolio of 122 senior-secured aviation loans across 70 narrowbody aircraft, six widebodies, 30 freighter aircraft, seven engines, and nine regional jet aircraft spanning 52 obligors. Apollo Global Solutions served as sole lead arranger and Redding Ridge Asset Management acted as a structuring agent on the transaction. BNP Paribas, Mizuho Americas, RBC and Apollo Global Solutions served as joint lead bookrunners. Milbank served as issuer counsel and Vedder Price acted as lender counsel.