Doric Asset Finance launches its first bond issuance – Doric Aviation Bonds I syndication starts today.

Victoria
By Victoria February 23, 2012 15:29

Doric Asset Finance launches its first bond issuance – Doric Aviation Bonds I syndication starts today.


The prospectus for the “Doric Aviation Bonds I” was approved for publication by the Commission de Surveillance du Secteur Financier of Luxembourg on 17th February 2012, marking the start of the syndication phase of the bonds. The securities will be issued by Doric Capital SA, a Luxembourg based company, and are expected to be listed on the Luxembourg Stock Exchange in June 2012.

The issue of the bonds will raise up to €65 million which will be used to partly finance the purchase of an Airbus A380 by a Guernsey based aircraft investment company, Futurus Limited. The aircraft is expected to deliver in March 2013, at which time Futurus Limited will enter into a long term lease of the aircraft to Emirates, the flag carrier of Dubai.

The “Doric Aviation Bonds I” bear interest at 9% per annum payable quarterly in arrears.

Doric Select (a Doric Group company) acts as investment advisor and placement coordinator. Doric Asset Finance has been appointed as asset manager of the aircraft by Futurus Limited.

The company said in a statement that this structure opens up new investor markets for aircraft financing. “In addition to facilitating the participation of retail investors residing in Austria, Germany, Luxembourg and Switzerland, the bonds are also structured so as to fulfil the reporting and transparency requirements of institutional investors in many jurisdictions.”

 

In other news:

Easyjet founder Sit Stelios has announced the launch of his new West African airline FastJet – A story we covered here in December and again in January. Look to the airline section of Africa/Middle East for an update. However, while we are on the subject of African aviation it is well worth noting that it is Eastern Africa which is seeing all the traffic increases due to massive Asian investment including land leases which are turning Africa into the bread basket of Asia just like it was before for Ancient Rome (see the January/February issue of Airline Economics for the full story on this). So in the middle of all this investment and infrastructure growth in East Africa what do we see today? The collapse of Air Zimbabwe. There can be no doubt that this leaves a huge opportunity for airlines to reach into the very heart of the East African breadbasket and therefore the centre of future food production for much of South East Asia…………Looking at recent announcements it is safe to say the Gulf state carriers and Chinese airlines have got in there first but there remains room for a low cost centered in the region to join all the dots. The problem for JetStar and the like, or indeed anyone else such as Sir Stelios, is that there needs to be three or four more years of growth to make such a project work on a large scale. This should mean that it is time for South African Airlines to begin tentative expansion efforts north and east so that they do not miss out on the potential of controlling their own regional sphere of influence. Alas it does seem that South African Airlines to date seems fixated on traditional routes. They have a goldmine on their doorstep in more ways than one and it is time management showed a little more passion for some sort of low cost to serve all eastern Africa which could then expand.

Also be sure to investigate the Indian decision to allow ATF imports – again. But do not rejoice yet for it seems all airlines need to start from scratch and reapply all over again (see APAC regulatory).

Victoria
By Victoria February 23, 2012 15:29
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