CDB Leasing IPO; HAIL ABS

Dino D'Amore
By Dino D'Amore June 22, 2016 10:47

CDB Leasing IPO; HAIL ABS

It is being reported that China Development Bank Financial Leasing hopes to raise as much as $978 million in a Hong Kong initial public offering (IPO). Some 79% of the offering will be offered to cornerstone investors, which have been identified as including: China Reinsurance Group, China State Shipbuilding, Guangdong Hengjian Investment Holding, Bank of China Group Investment, China Communications Construction and state-owned power generator China Three Gorges. The latter is reported by Reuters to be planning to purchase about 42 percent of the IPO stock.

CDB Leasing is offering 3.1 billion new shares at HK$1.90 to HK$2.45 each.
The IPO is scheduled to price next Wednesday. Bank of America, Citic CLSA., Deutsche Bank, HSBC and UBS are joint global coordinators.

Meanwhile, newbie aircraft lessor, Aergen, is preparing to launch a $324.7million asset backed securitization. Habor Aircraft Investments Series 2016-1 is a three tranched ABS, all with a final maturity of July 2014, which comprises: $246.7 million A notes with an initial loan-to-value of 63.7%, rated A by Kroll Bond Rating Agency; a $47 million B notes, rated BBB by Kroll, with an initial LTV of 75.9%; as well as a $31 million C notes tranche, rated B, with a LTV of 83.9%.

The Series A Loans and Series B Loans will initially amortize during the first and second years based on an approximated 11-year straight-line amortization schedule and during the third and fourth years based on an approximated 14-year straight-line amortization schedule. Commencing in the fifth year of the transaction and thereafter, the Series A Loans and Series B Loans will amortize based on a 13-year straight-line amortization schedule. There is a cash sweep in the fifth year of the transaction, to accelerate the repayment of the Series A Loans and Series B Loans.

The Series C Loans will initially amortize during the first year based on an approximated 5-year straight-line amortization schedule. In year two, the Series C Loans will amortize based on a 5-year straight-line amortization schedule and in the third year and thereafter, a 7-year straight-line amortization schedule.
Commencing in the second year of the transaction, there will be a cash sweep to accelerate the repayment of the Series C Loans equal to 30% of all remaining available collections.

The notes are secured on a portfolio of 15 aircraft, which has an initial weighted average age of approximately 12.7 years. Over 90% of the portfolio consists of liquid A320/321-200s and 737-800s. The three largest lessees by value are Virgin America, SAA/Mango and SAS, which represent approximately 22.7%, 10.5% and 8.1%, respectively.

Aergen is the servicer for the portfolio. Maples is the managing agent, Wells Fargo is the trustee, while DVB is providing the nine-month liquidity facility. Deutsche Bank is the sole structuring agent and lead left joint arranger.

Dino D'Amore
By Dino D'Amore June 22, 2016 10:47