Avolon to use $636 million raised through securitisation deal to refinance debt
Special purpose company plans to borrow from institutional lenders by issuing bonds
Emerald Aviation Finance will use the cash to buy 20 aircraft from Avolon
Aircraft leasing specialist Avolon will use $636 million raised from securitising part of its fleet to refinance its existing debt.
Avolon confirmed yesterday that its new special purpose company, Emerald Aviation Finance, plans to borrow $636 million from institutional lenders by issuing bonds secured against some of the group’s assets.
Emerald will use the cash to buy 20 aircraft from Avolon, which will in turn use the money to refinance some of its existing debt.
The bond issue will be made up of $546 million worth of loan notes with an interest rate of 4.65 per cent and $90 million repayable at 6.35 per cent.
A statement from Avolon said yesterday that the deal is expected to close “on or about” October 16th next.
The craft involved are leased to 15 operators in 14 different countries and are a mix of jets with an average age of just over three years.
Securitisation exercises such as this are common in aircraft leasing.