Avolon raises $750m in new debt deal amid strong demand for aircraft

Aircraft lessor has raised $3.4bn this year from a variety of sources

The transaction brings to $3.4 billion the amount Avolon has raised through a variety of sources this year as it looks to “capitalise on attractive market dynamics,” said Ross O’Connor, Avolon chief financial officer.

Avolon, the Dublin-based aircraft lessor, on Tuesday said it has raised $750 million (€699 million) in debt through a new credit facility as it looks to take advantage of a booming market for aircraft.

The company said the new credit line, extended through a syndicate of seven banks in the Middle East and India, will also strengthen its banking links to those regions and diversify Avolon’s capital pool.

The three-year facility, which includes options to extend the loan term to five years, brings to $3.4 billion the amount Avolon has raised through a variety of sources this year as it looks to “capitalise on attractive market dynamics,” said Ross O’Connor, chief financial officer at Avolon. Aircraft leasing companies have seen an explosion in demand for their services in recent years amid a shortage of aircraft globally.

JP Morgan and Emirates NBD acted as joint bookrunners for the transaction.

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“We’re pleased to partner with Avolon on this transaction, using the strength of our franchise to support their growth,” said Puja Turner, head of loans and structured credit for JP Morgan’s Middle East region. “As banks in the Middle East and India deepen their understanding of the lessor business model and look to deploy capital beyond domestic markets, we anticipate they will be a growing source of funding for aviation businesses with a strong track record.”

Avolon raised $1.4 billion (€1.29 billion) of unsecured debt capital in the first quarter, according to its April trading statement, comprised of $1.15 billion in senior unsecured notes due in 2029 and a $250 million unsecured term loan due for repayment in 2026.

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times