AFIC officially launched by Marsh

Eleanor Steed
By Eleanor Steed June 1, 2017 16:36

AFIC officially launched by Marsh

Marsh has today announced the launch of Aircraft Finance Insurance Consortium (AFIC), the non-payment insurance product designed for banks and capital market investors that are funding new aircraft purchases from Boeing. The structure has already been used by Korean Air to refinance a new 747-8i in April, which wrapped a 10-year €143mn loan from ING. Marsh states only that the structure has been used “by a major international airline to support its financing of new Boeing 747 and 787 aircraft”.

Available exclusively through Marsh, AFIC provides an alternative aircraft finance insurance product for new aircraft deliveries and is underwritten by four global insurance companies, Allianz, AXIS Capital, Sompo International (formerly Endurance), and Fidelis.

AFIC uses insurance to protect the lender’s exposure to default for the duration of the loan – much in the same way the guarantee from the US Export-Import Bank, which remains hobbled. Marsh says that the terms of this insurance can be “tailored according to the individual purchase agreements made between Boeing, the airline, and its financiers”.

Bruce Fine, Global Leader of AFIC for Marsh, said: “We believe that AFIC is a significant development in airline financing globally and will contribute to the growth and diversification of aircraft finance. AFIC offers Boeing customers a wider range of financing options to facilitate the purchase of newer, more efficient aircraft to enhance their fleets, and lenders will be able to conduct new transactions with greater confidence.”

Eleanor Steed
By Eleanor Steed June 1, 2017 16:36