Deucalion ABS – first aircraft securitization of the year

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By admin February 3, 2015 17:26

Deucalion ABS – first aircraft securitization of the year

DVB’s aviation investment vehicle, Deucalion, is set to launch a $667million aircraft asset-backed securitization (ABS) backed by 20 aircraft.

The $667 million AIM Aviation Finance Ltd./AIM Aviation Finance USA LLC Fixed-Rate Notes Series 2015 A-1, B-1, and C-1, consists of three tranches. The $545million A-1 notes are rated A by S&P; the $84 million BBB-rated B-1 notes; and the $38million C-1 notes rated BB. All mature on February 15, 2040.   The 71.37%, 82.37%, and 87.35% loan-to-value (LTV, based on the lower of the mean and median [LMM] of the aircraft half-life values) ratios for the series 2015 A-1, B-1, and C-1 notes, respectively.

The series A-1 and B-1 notes follow a 14-year straight-line amortization to zero and after the expected maturity date (at the end of year seven), they will accelerate principal payments if they are not refinanced (meaning there will be no distribution to the series C-1 notes lender until the series A-1 and B-1 notes are paid off, sequentially). The series C-1 notes (the junior-most rated deferrable interest class) follow a seven-year straight-line amortization to zero and will be paid after the series A-1 and B-1 notes’ scheduled amortization before the expected maturity date and after the series A-1 and B-1 notes’ turbo amortization beyond the expected maturity date.

S&P’s pre-sale report states that the series 2015 A-1, B-1, and C-1 notes are co-issued by AIM Aviation Finance Ltd., a Cayman Islands special-purpose entity (SPE) and Irish tax resident (AIM Cayman), and AIM Aviation Finance USA LLC, a Delaware SPE and a wholly-owned subsidiary of AIM Cayman (AIM USA, and, together with AIM Cayman, AIM). The notes are backed by a portfolio of 20 commercial passenger aircraft currently on lease to 13 airlines. The 20 aircraft include 15 narrow-body planes (11 A320 family, three B737NG, and one B737 classic) and five wide-body planes (two A330-200 and three A330-300), with a 5.7-year weighted average age. The aircraft have a 6.2-year weighted average remaining lease maturity.

The aircraft seller is Deucalion, while the Aviation Asset Management (AAM) section of DVB is the servicer of this transaction.

BNP Paribas is lead arranger. DVB Bank is the liquidity facility provider.  Managing agent is Maples Fiduciary Services (Ireland), with Wells Fargo as the trustee and operating bank.

admin
By admin February 3, 2015 17:26