Avolon boosts unsecured loan to $500m after ‘strong support’
International lenders oversubscribe to Irish aircraft lessor’s attempt to raise $300m
Avolon chief executive Dómhnal Slattery has seen an encouraging response to its plan to borrow $300m from global banks. Photograph: Bloomberg via Getty Images
A strong response to its plan to borrow $300 million (€264.5 million) from global banks prompted Irish aircraft lessor Avolon to increase the debt to $500 million.
Avolon recently said that it intended raising an unsecured $300 million loan from a group of banks which the Irish company intended using for general business purposes, possibly including paying off other debt.
The aircraft lessor said on Tuesday that the transaction was oversubscribed. Consequently, it has increased the loan by more than 60 per cent to $500 million.
Avolon managing director of capital markets Dave Murray said the company was pleased with the market’s reaction.
“This strong support reflects Avolon’s strong track record of delivering consistent returns, strong cash flows and credit metrics, and proven management capability,” he said.
Mr Murray noted that raising the unsecured loan was a key step towards Avolon securing an investment-grade rating.
The company needs to cut the proportion of secured debt on its books to get its credit rating upgraded, a move that could potentially cut its borrowing costs.
A group of 13 banks loaned the money to Avolon. They include: The Korea Development Bank Singapore Branch, CommBank Europe, Philippine National Bank, SunTrust Bank, Wells Fargo Bank NA, Woori Bank London, Woori America Bank, DBS Bank, BayernLB, Norddeutsche Landesbank Girozentrale and Aozora Bank.
Natixis head of global aviation Gareth John said the deal highlighted the financier’s expertise in aviation.
Law firm Clifford acted as the lenders’ counsel while Milbank advised Avolon.