ECAF I Ltd. Closes $1.21bn ABS

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By TESTCustomwebLP TESTCustomwebLP June 23, 2015 10:20

ECAF I Ltd. Closes $1.21bn ABS

Element Financial has closed its US$1.21bn debt offering of ECAF I Ltd., Series 2015-1 Notes. The Company acted as structurer in the formation of ECAF I Ltd. and sourced the third-party institutional equity co-investors in this new asset backed securities (ABS) issuer. The Company will also act as the ongoing Administrator to ECAF I Ltd. and has retained BBAM Aviation Services Limited, an affiliate of BBAM Limited Partnership, to act as the servicer with respect to the portfolio under the terms of a multi-year contract.

“ECAF I is the largest pooled-aircraft ABS transaction in nearly a decade,” said David McKerroll, President of Element’s rail and aviation group. “The market’s overwhelming support for this precedent-setting transaction sets a new benchmark for future issuance in the commercial aviation ABS market and brings a new level of liquidity to the asset class.”

The deal was comprised of three tranches of ABS notes secured by a portfolio of 49 commercial aircraft, with an initial appraised value of approximately US$1.57 billion, on lease to 38 airlines.

The $459.375 million Class A-1 notes were rated A by S&P and A- by Fitch have a Weight Average Life (WAL) of 3.57 years, with a coupon of 3.473%.

The Class A-2 notes, which totalled $590.625 million, were rated A and A- with a WAL of 6.97 years. They carry a coupon of 4.947%. The $160 million Class B-1 notes, rated BBB by both S&P and Fitch, have a WAL of 5.49 years and a coupon of 5.802%.

“This complex transaction, which required multiple equity participants, was engineered to meet the yield and liquidity needs of our institutional funding partners,” said Scott Corman, Element’s Executive Managing Director and head of the Company’s structured finance unit. “It could not have been brought to fruition without the specialized skills that are at the core of Element’s structured finance team.”

As structurer for the offering and for sourcing the equity, Element earned transaction fees on closing of the deal and is expected to earn ongoing fees as Administrator. Element will also earn equity returns from its ongoing participation in the equity syndicate. Element’s ongoing retained equity participation will represent less than 20 percent of the holdings of the equity syndicate.

Deutsche Bank, BNP Paribas and Citigroup acted as joint bookrunners.

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By TESTCustomwebLP TESTCustomwebLP June 23, 2015 10:20