A viation ABS has evolved meaningfully over the past decade, from lease-backed structures to more complex loan ABS platforms designed to meet diverse investor appetites and funding objectives. Phoenix American’s previous white papers on this market have explored those developments in detail. The emergence of the Master Trust structure marks the next major step in this evolution: a structural innovation purpose-built to support scale, transparency and repeat issuance in a maturing market.
This shift comes at a time of major transformation within the aviation finance landscape. Following the dislocations of the COVID-19 pandemic and the high interest rate environment, the aviation ABS market has not only rebounded but recalibrated. Lessors and investors alike have adapted to post- COVID realities: new patterns of travel demand, tighter financing conditions and evolving views on aircraft types and lease structures. The result has been a more selective, more resilient market with stronger execution reserved for issuers with scale, sophistication and clarity of strategy.
The AASET MT-1 platform, developed by Carlyle Aviation Partners, was made possible by having a pre-identified pool of 70 plus aircraft, a fact that transformed Carlyle’s scale and pipeline visibility and made a Master Trust issuance model both practical and necessary. Similar dynamics are at play across the industry, as platforms seek growth through acquisition and efficiency through structural innovation.
The numbers tell the story. Between June 2024 and July 2025, the aviation ABS market recorded over $10 billion in new issuance, including a growing share of transactions from repeat issuers. The depth and diversity of that activity, both in terms of aircraft/loan profiles and investor participation, reflects not just a market in recovery, but one entering a more institutional, programmatic phase.
As that shift continues, the Master Trust structure offers a critical enabling mechanism. It allows scale issuers to manage securitizations as a platform, rather than a series of isolated programs. It simplifies execution, broadens the investor base and delivers the operational and reporting consistency that repeat issuance demands. It is not a replacement for traditional ABS but, for a certain class of issuer, it is potentially a better way forward.
The Master Trust structure
In traditional aviation ABS transactions, each securitization is established as its own self-contained legal structure. The collateral is isolated, the debt is ring-fenced and the documentation and servicing apparatus is rebuilt for each deal. This structure has been successful but can be limited, particularly for serial issuers with growing portfolios and recurring securitization needs.
A Master Trust offers a fundamentally different approach. Rather than creating a new trust for every issuance, the Master Trust model establishes a single legal vehicle that can issue multiple issuances of notes over time. Each issuance, known as a series, is secured by a distinct pool of assets, but all series are backed by the same trust and benefit from cross-collateralization: the cash flows from any assets in the trust are used to support all outstanding note series.
This structural integration provides immediate operational efficiencies and longer-term strategic flexibility. Once the trust is established, subsequent deals are streamlined. There is no need to set up new SPVs, new legal teams or new servicing structures. More importantly, issuers can continue adding aircraft and issuing new debt from the same platform, subject to clearly defined eligibility criteria.
While Master Trusts are well-established in other securitized asset classes such as auto ABS, their application in aviation ABS is novel. AASET 2024-1 and AASET MT-1 represent a structural breakthrough, adapting a proven model to meet the current operational realities of aircraft leasing.
The first application of this structure in aviation ABS was AASET 2024-1, a Master Trust platform launched in 2024 by Carlyle Aviation Partners, with Phoenix American as Managing Agent. This was followed in 2025 by the launch of AASET MT-1 by Carlyle Aviation Partners. In the case of AASET MT-1, the Master Trust is structured to remain open for two years, during which time the issuer may contribute additional aircraft and issue subsequent series. Aircraft must be pre-identified and meet strict conditions to preserve the credit and performance profile of the Master Trust: they must be on lease, within defined age ranges, within defined remaining lease terms, within defined terms regarding new technology and aircraft type and associated with strong lessees. New series may only be issued if the overall trust remains in compliance with its debt service coverage and lease utilization covenants and the assumed repayment date for the subsequent issuance is no later than 12 months from the assumed repayment date of the initial issuance.
Importantly, the Master Trust also simplifies refinancing. Beginning three years after issuance, the issuer may reprice a given series, if covenants are met. The repricing would have to be accompanied by a solicitation process of noteholders and the redemption or transfer of notes held by noteholders who do not consent to the repricing. The change would also be subject to ratings agency approval.
From a risk management perspective, the Master Trust offers advantages for both investors and rating agencies. Pooling aircraft across a series diversifies lessee, geographic and asset-type exposure, while cross-collateralization helps absorb shocks and preserve recoveries. Performance across the trust is reported consistently by a single managing agent, enhancing transparency and enabling more informed investment decisions in subsequent issuances.
In short, the Master Trust structure is not merely a more efficient version of traditional ABS, it is a new structural model designed to accommodate scale, streamline operations and align investor protection with issuer flexibility. For serial issuers with significant and recurring aircraft portfolios, it offers a better way forward.
To ensure consistency across the portfolio, asset additions must conform to defined eligibility criteria as noted above. Such constraints preserve investor confidence across issuances and support cross- collateralization integrity.
AASET MT-1
The Master Trust structure is no longer theoretical. Following the successful testing of the market with AASET 2024-1, the aviation industry’s first aircraft ABS Master Trust, Carlyle Aviation launched AASET MT-1 in early 2025. AASET MT-1 has issued two separate issuances of series of notes within its first six months. The AASET MT-1 platform is structured to allow multiple issuances over a two-year window from the initial issuance with pooled collateral and cross-collateralized repayment obligations across all series. The trust remains open for further issuances until either the exhaustion of the pool of pre-identified aircraft or with the issuance window closing in February 2027.
The AASET MT-1 platform was designed around a preidentified pool of aircraft. This pool of aircraft provided the necessary scale and pipeline visibility to justify a multi-series issuance strategy and made the Master Trust format especially well-suited to Carlyle’s platform growth goals. With sufficient scale and an identified pool of aircraft, Carlyle was positioned to issue multiple series of notes efficiently without creating a separate structure for each. The Master Trust allows the firm to pool aircraft over time into a single, integrated platform with unified servicing, consistent performance reporting and cross-collateralized risk-sharing across all issuances.
The 2025-1 initial issuance, which closed in February 2025, included 23 aircraft, comprised of new-technology narrowbodies such as the A320neo, A321neo and 737 MAX 8 and one widebody aircraft. The pool had a weighted average age of just 8.8 years and an average remaining lease term of 5.3 years. Aircraft were placed with 17 different lessees across 13 jurisdictions, all on long-term leases and none in default. The series raised $518.3 million across two rated tranches and an E-Note, with risk metrics in line with conventional aviation ABS. Following the issuance of Series 2025-2, the effective LTV on the original Series B-1 notes rose from 77% to 79%, due to their pari passu ranking with the Series B-2 notes in the waterfall.
2025-2 issuance, closed in June 2025, added a further 23 aircraft, bringing the trust total to 46. The additional pool closely mirrored the first in asset quality but also improved the trust’s profile overall: weighted average age decreased from 8.8 to 8.7 years, weighted average lease term increased from 5.3 to 5.6 years and top-three lessee concentration dropped from 32.8% to 30.8%. New-technology aircraft now comprise 34.4% of the total portfolio.
Together, the two issuances draw from a pre-identified pool of more than 70 aircraft, all governed by structural constraints designed to maintain consistency and performance across the trust. Performance-based triggers are central to the structure. Each new issuance must meet defined thresholds for debt service coverage and lease utilization. Each issuance also included independent liquidity facilities, provided by Natixis for Series 2025-1 and Société Générale for Series 2025-2, sized to nine months of interest. Series B-note tranches included six-month interest reserve accounts established at each closing. Repricing or refinancing of outstanding notes is permitted following the third anniversary of the initial issuance, provided the trust remains incompliance. The process requires a formal noteholder solicitation and rating agency review, ensuring investor protections while allowing funding costs to be optimized over time.
AASET MT-1 is administered by Phoenix American, which serves as the Managing Agent for the trust. Its investor reporting role includes consolidated monthly reporting, covenant monitoring and waterfall execution for all issuances, while Carlyle continues as servicer across the platform. This unified approach to operations and transparency exemplifies the potential of the Master Trust model – not only to streamline execution, but to deliver consistency and clarity for investors over time. Investors in later series benefit from full visibility into the performance, servicing and reporting of earlier issuances, a feature not available in standalone ABS structures.
Benefits to issuers
For issuers with recurring capital markets activity, the Master Trust model offers tangible and repeatable advantages that go well beyond structural elegance. By consolidating infrastructure, standardizing execution and streamlining investor reporting, the Master Trust unlocks a level of operational and financial efficiency unavailable in traditional ABS.
Cost Savings
The most immediate benefit is cost. In conventional aviation ABS, each new deal requires a full reset: new legal entities, new documentation, new servicing mechanics and parallel administrative infrastructure. Legal, rating, trustee and associated fees compound with every issuance. By contrast, a Master Trust creates a single legal platform with repeatable mechanics, enabling new series to be issued without re-establishing the full suite of support functions. For serial issuers planning multiple deals over time, saving on these costs can be material, especially in a rising-rate environment or a tight equity capital context.
Operational Simplicity
Beyond cost, the Master Trust model reduces operational burden. With a single trust, there is no need to create and manage multiple SPVs, boards of directors or overlapping trustee relationships. Investor reporting and waterfall execution is conducted by a single managing agent, Phoenix American, using a consistent platform across all series. This standardization extends to monthly reporting, covenant tracking and investor communication, eliminating redundancy and creating a more transparent experience for noteholders and sponsors alike. The unified trust structure also simplifies audits, regulatory compliance and internal oversight for Issuers managing multiple portfolios or platforms.
Strategic Flexibility
Perhaps the most valuable benefit is strategic flexibility. The Master Trust is structured to remain open for a defined period (two years in the case of AASET MT-1), allowing issuers to bring multiple series to market based on opportunity and market conditions. This is especially useful when portfolio composition is known in advance but market timing is uncertain. All aircraft must meet clearly defined eligibility criteria - including age, lease profile, and lessee quality – but issuers are not constrained by the rigid timing and one-time nature of conventional ABS structures. Issuers also gain valuable funding optionality through the ability to reprice outstanding notes three years after the initial issuance, provided trust-level performance tests are satisfied. This feature allows sponsors to reduce their cost of capital over time without reassembling a new structure.
Platform Scalability
Finally, the Master Trust enables scale. While traditional aviation ABS structures generally top out at 30to 35 aircraft, the Master Trust can support 40 to 60 aircraft or more across multiple issuances. This broader platform increases lessee, geographic and asset diversification, enhancing ratings stabilityand investor appeal while preserving a unified credit and performance narrative across issuances.
Benefits to Investors
While the Master Trust structure offers significant advantages to issuers, it also introduces a range of meaningful benefits for investors - particularly those participating across multiple issuances. By enhancing diversification, transparency and oversight, the Master Trust aligns structural innovation with investor protection.
Cross-Collateralization and Risk Mitigation
Perhaps the most important structural feature from an investor perspective is cross-collateralization. In a Master Trust, cash flows from any aircraft in the trust can be used to support any series of outstanding notes, provided performance triggers are met. This interconnection reduces exposure to individual aircraft or lessee performance. Compared to standalone ABS structures, where each pool must stand on its own, the Master Trust offers a broader platform for risk sharing and recovery.
Transparency Across Series
Because all series are issued from the same legal trust, performance data is unified across the platform. Monthly reporting, covenant monitoring and waterfall execution are administered by a single managing agent, providing consistent documentation and a consolidated view of trust performance. For investors participating in later series, this allows for due diligence based not just on initial assumptions, but on the actual performance history of earlier tranches. In the case of AASETMT-1, investors in Series 2025-2 had full visibility into the servicing, default activity, lease status and credit metrics of Series 2025-1 – a dynamic that is not possible in standalone ABS.
Simplified Monitoring and Documentation
Tracking performance across a traditional ABS platform typically requires investors to navigate multiple deals, indentures, trustee reports and servicing platforms. The Master Trust consolidates these into a single trust with standardized documentation and reporting formats. Investors no longer need to reconcile divergent templates or monitor unrelated vehicles. This structural clarity enhances both day-to-day monitoring and long-term
portfolio management.
Diversification and Credit Stability
The ability to scale the trust across multiple series creates a naturally diversified asset pool. As of August 2025, AASET MT-1 included 46 aircraft with leases to 26 lessees across 18 countries and portfolio metrics improved with the addition of Series 2025-2: average lease term lengthened, average age declined and lessee concentration dropped. This progressive improvement is by design. The trust agreement imposes conditions on each new issuance to ensure that new aircraft do not dilute the
credit quality of the overall pool. The result is a dynamically maintained performance profile, where asset additions must meet or exceed existing standards to protect all noteholders.
Investor Protections Remain Intact
Even as the trust gains flexibility and scale, investor protections are preserved through a layered approach:
Liquidity facilities are established independently for each series (e.g., In AASET MT-1 Natixis for Series 2025-1 and Société Générale for Series 2025-2), ensuring resilience in the event of payment delays.
Repricing provisions, while available to the issuer after year three anniversary of the initial issuance, require noteholder consent and rating agency review, maintaining a high bar for any changes that might impact investor returns.
In sum, the Master Trust structure is not only efficient, it is intentionally designed to build investor confidence through transparency, diversification and enforceable safeguards. For investors seeking exposure to aircraft ABS in a recovering sector, it offers a more scalable and intelligent way to
deploy capital.
Application for future issuers
The Master Trust model is not a one-size-fits-all solution. It is best suited to lessors and platforms that expect to complete multiple securitizations over a defined period - particularly those with access to a sizable, forward-visible fleet. For issuers planning three or more ABS deals within 24 months, the Master Trust structure can offer meaningful advantages in cost, time and flexibility.
Critically, the model favors organizations with pre-identified aircraft portfolios. Carlyle’s AASET MT-1 platform was built on a pre-identified pool of 70 plus aircraft, with 46 aircraft from that pool included in its first two issuances. This kind of portfolio certainty enables tighter alignment with investor expectations and structural integrity across issuances.
That said, future adopters do not need to have every aircraft in-hand. What is required are robust structural constraints to ensure consistency across the trust, regardless of when or how new aircraft are added. These constraints may include:
- Maximum average age thresholds
- Minimum remaining lease terms
- Specific credit quality standards for lessees
- Limits on aircraft types (e.g., narrowbody vs. widebody)
- Required percentage of new-technology aircraft
Such parameters must be codified in the Master Trust documentation and adhered to across all issuances. This ensures that later issuances do not dilute the quality or creditworthiness of the overall pool, protecting both current and future noteholders. Importantly, these structural rules help maintain transparency and continuity for investors - one of the key differentiators of the Master Trust format.
While Carlyle was the first to implement this model in aviation ABS, the approach is not without precedent. Similar structures are common in auto and equipment ABS, particularly among high volume issuers with consistent origination pipelines. As consolidation continues across the aircraft leasing space, other lessors may find themselves in a position similar to Carlyle’s - holding a large fleet with a multi-year securitization plan. For these firms, a Master Trust could offer the
optimal vehicle.
Adopting the structure will still require thoughtful planning, including early engagement with investors, rating agencies, legal counsel and liquidity providers. Managing agent selection is also a critical component, as a single party will be responsible for consolidated waterfall execution, compliance tracking and investor reporting across all series.
Ultimately, the Master Trust model is a fit-for-purpose tool. It is not suitable for every issuer, but for those with sufficient volume, portfolio clarity, and execution discipline, it offers a path to more efficient capital markets access. As market familiarity grows and execution proof points accumulate, more issuers may find that this “next evolution” in aviation ABS is also a logical next step for them.
A Smarter Way Forward
The Master Trust structure represents a meaningful evolution in aviation ABS - purpose-built for scale, efficiency and sustained issuance. By replacing the one-deal-one-structure model with an open, flexible platform, it enables repeat issuers to consolidate execution, streamline operations, and enhance transparency across multiple deals.
The early success of the AASET MT-1 platform has shown that this model is not only viable but advantageous for issuers seeking operational leverage, for investors demanding visibility and diversification and for the market as a whole as it adapts to a
higher-volume environment.
This is not a theoretical framework or one-off experiment. It is a practical, proven solution for issuers with meaningful deal flow and pre-identified portfolios. Where traditional ABS created silos, the Master Trust builds bridges - linking past, present and future issuances in a single, coherent structure with shared standards and integrated oversight. For aviation lessors with serial issuance needs, the message is clear: a Master Trust platform is worth serious consideration. When the fundamentals are in place – portfolio scale, deal frequency and structural discipline – the benefits are real, repeatable and increasingly hard to ignore.