British Airways EETC priced

victoria@aviationnews-online.com
By victoria@aviationnews-online.com March 19, 2018 18:00

British Airways EETC priced

British Airways (BA) priced its $608.74million second enhanced equipment trust certificate (EETC) transaction, which also incorporates Japanese Operating Lease with Call Option (JOLCO) tax equity, on March 14

The $409.783 million class AA certificates with an initial loan-to-value (LTV) of 48.6%, a 13.5 year tenor and an average life of 7.4 years, which was rated AA- by Fitch Ratings, has an all-ion yield of 3.80% and a spread to US Treasuries of 98 basis points (bps).The $198.957 million class A certificates with an initial LTV of 72.2%, rated A- by Fitch, also with a 13.5-year tenor and a weighted average life of 7.4 years, priced at 4.125% with a 130.5bps spread. Both tranches were oversubscribed although the AAs were the most popular notes.

The notes are secured on a portfolio of 11 aircraft: ten new aircraft – seven A320neos, one 787-8 and two 787-9s – and to refinance one 787-8 that delivered in September 2017. The new aircraft are scheduled for delivery between March 2018 and October 2018.

The strength of the credit and the aircraft portfolio attracted strong interest from investors despite the choppy market at the start at the week, which is testament to the bookrunners to price well within the 4.85% weighted average coupon of BA’s 2013 EETC transaction. Given the five year absence from the market, a non-deal roadshow was conducted to remind investors of the BA credit especially since the airline’s financials are wrapped up with parent IAG and the additional complexity posed by the JOLCO equity investment.

Citi is the sole structuring agent and lead bookrunner. Deutsche Bank and JPMorgan were bookrunners. Milbank advised the banks, while Clifford Chance advised the issuer.

One more non-US EETC is understood to be in negotiations with a potential deal expected to come to market soon.

victoria@aviationnews-online.com
By victoria@aviationnews-online.com March 19, 2018 18:00