GECAS out with STARR II

Lauren Eldershaw
By Lauren Eldershaw April 2, 2019 14:52

GECAS out with STARR II

GE Capital Aviation Services (GECAS) has launched a sequel to STARR 2018-1, its revolutionary asset backed securitisation (ABS) with a tradeable equity portion. STARR II 2019-1 issues $474 million of debt in three tranches of notes: $382 million A notes, rated A by Kroll Bond Rating Agency (KBRA), with an initial LTV of 64.9%; $69 million B notes, rated BBB, with an LTV of 76.6%; and $23 million C notes, rated BB with an LTV of 80.5%.

The notes are secured on a portfolio of 20 aircraft – seven 737-800s, four A320-200s, three A321-200s, three A319-100s, two 737-900ERs and one 737-700 – which are on lease to 13 lessees located in 11 countries, with an initial weighted average aircraft age of 5.9 years and a weighted average remaining lease term of approximately 6.6 years. The portfolio has an initial value of approximately $588.7 million, based on the average of the half-life base values provided by three appraisers and adjusted for maintenance conditions.

GECAS will act as servicer for the transaction, and an affiliate of GECAS will be acquiring a small minority percentage of the equity in STARR II. No doubt responding to criticism concerning high fees in the STARR I transaction, in STARR II the asset manager fee has been reduced and the location of the waterfall has been changed.

Deutsche Bank is again the lead structuring agent and lead bookrunner. Credit Agricole-CIB is providing the nine-month liquidity facility. Since the aircraft are yet to be acquired, standby letters of credit are supplied by CA-CIB and Natixis. Citi is the security trustee, operating bank and trustee. Canyon Financial Services is acting as managing agent.

Lauren Eldershaw
By Lauren Eldershaw April 2, 2019 14:52