KBRA out with ABS market and widebody analysis

victoria@aviationnews-online.com
By victoria@aviationnews-online.com January 22, 2018 16:03

KBRA out with ABS market and widebody analysis

In a new report, Kroll Bond Rating Agency (KBRA) looks back at the Aircraft ABS transactions issued over the past year and focuses on several developing trends and challenges facing the sector.

First and foremost, 2017 was a record year for Aircraft ABS issuance, with 12 transactions totaling over $6.5 billion completed. Over the past several years, investor appetite has increased for the sector and spreads continued to tighten over the course of 2017. Companies who chose to access the capital markets in 2017 represented a “who’s who” of aircraft lessors, including a few repeat issuers as well as first time issuers. The profile of aircraft lessors that accessed the market for the first time in 2017 included several new companies with highly experienced management teams.

After an eventful 2017, KBRA anticipates that 2018 will continue at a similar pace. KBRA expects repeat issuances by certain sponsors and also new issuances by several issuers that plan to enter the market.

The full report can be accessed here

In a further report, KBRA states that it expects the market for widebody aircraft to undergo meaningful changes over the next several years as a result of upcoming lease expiries, slowing widebody orders, and continued bifurcation of liquidity based on aircraft size. In says that the introduction of several new widebody types through 2020 could have significant implications for investors over the long term. The abundance of aircraft options suggests that few widebody types will develop market mass and a liquid secondary market, which could limit re-leasing and disposal options and potentially hinder investor returns and debt recoveries.

Access the report here

victoria@aviationnews-online.com
By victoria@aviationnews-online.com January 22, 2018 16:03