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Elix Aviation launches debut ABS transaction

Eliz Aviation has announced its debut issuance in the aircraft asset backed securitisation market with a three tranched, loan format transaction secured on a portfolio of 63 turboprop aircraft that are initially leased to 17 airlines located in 12 countries with an initial total value of approximately $545.1 million. As of December 31, 2016, the 63 aircraft included in the transaction represent approximately 82.9% (by number of aircraft) of Elix’s managed leased fleet.

The $411 million deal, Prop 2017-1, is split into: $300 million of A loans, which mature in 2042, and have an initial loan-to-value ratio of 55.0% and are rated A by Kroll Bond Ratings; $57 million of B loans, with an initial LTV of 65.5%, rated BBB by KBRA; and $54 million C loan tranche, rated B By KBRA, which have an initial LTV of 75.4%. The E note will be sold. The transaction benefits from sufficient credit enhancement and liquidity, as well as a dynamic structure that accelerates principal payments on the Loans in the event of weak performance.

The portfolio is comprised of a mix of turboprop aircraft, including ATR 42-300/500, ATR 72-500/600, Dash 8-100/200/300/400s, with an initial weighted average age of approximately 9.7 years, with a significant portion of newer vintage aircraft defined as less than six years in age, while end-of-life aircraft, typically defined as older than 18 years in age represent approximately 31.3% by value. The main lessees in the portfolio are Commut Air, Island Air, Alliance Air, Ethiopian Airlines and Piedmont. The weighted average remaining term of the initial lease contracts is approximately 5.0 years and more than 55% expire in four years or longer.

Date: February 2, 2017
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