Sculptor Capital Management has closed its second asset-backed securitisation (ABS) transaction, the three-tranched $706.5 million SOLRR Aircraft 2021-1, which is secured on a portfolio of 22 narrowbody aircraft leased to 10 airlines in eight countries. Stratos is the servicer, with Altavair named as the sub-servicer for five Delta Air Lines aircraft included in the portfolio. The equity was provided by a fund managed by Sculptor Capital Management, Sculpor Capital LP.
SOLRR 2021-1 comprises: $550.4million A notes, rated A by Moody’s, which have a 78.6% loan-to-value ratio (LTV); $90.4 million Baa2-rated B notes with a 12.9% LTV; and $65.7 million Ba3-rated C tranche with a 9.4% LTV.
Proceeds from the notes will be used to acquire the aircraft owning entities from LUNAR Aircraft – an aviation ABS transaction that closed in February 2020 with equity owned by an affiliate of Sculptor Asset Management.
The 22 aircraft portfolio comprises only narrowbody aircraft: five 737-900ERs on seven-year leases to Delta Air Lines, four A320neos on lease to Indigo, three A320s on eight-year leases to easyJet; two A320s on six-year leases to Wizz Air; one A320 and one 737-800 on three and four-year leases, respectively, to China Eastern Airlines; one A320neo on a 10-year lease to VivaAerobus; one A321-200 on a seven-year lease to Aeroflot; one 737-800 on an eight-year lease to Turkish Airlines, and one A320 on a nine-year lease to Spirit Airlines.
The average weighted age of the portfolio is 4.1 years, with an average remaining lease term of 6.4 years, which is slightly shorter than most recent deals in the market. Despite this reports indicate that the debt achieved the tightest three-class pricing in the aircraft securitisation market to date. Deutsche Bank was sole structuring agent and bookrunner.
Gary Fitzgerald, CEO of Stratos, said: “We are thrilled with our involvement in another highly successful securitization and very excited to be working with the Sculptor team on this top-grade portfolio. We’d like to thank our many institutional clients who stepped up to the plate to deliver incredible economics in a market with particularly heavy supply in the run-up to thanksgiving. We really appreciate the excellent cooperation we received from our airline clients to facilitate the novation of the various aircraft”