Willis Lease Finance issues WEST IV

Eleanor Steed
By Eleanor Steed August 9, 2018 14:47

Willis Lease Finance issues WEST IV

Willis Lease Finance is in the market with its fifth asset backed securitisation transactions – Willis Engine Structured Trust IV. The structuring agent on the deal is BofA Merrill Lynch; Bank of America is also providing the liquidity facility. Willis Lease Finance will remain as servicer and administrative agent for the portfolio of 55 engines and one 737-800 aircraft.

The $373.439 million ABS transactions is comprised of two classes of notes: $326.759 million A notes, rated A by Kroll Bong Rating Agency, with an initial loan to value (LTV) of 70%; and $46.68 million BBB-rated B notes with an LTV of 80%.

Fifty four of the assets in the portfolio are on lease to 28 lessees located in 18 countries, along with two engines currently not subject to a lease agreement. The engine types in the portfolio include: 12 V2500-A5s, 11 CFM56-5Bs, 15 CFM56-7Bs, three Genx-1Bs, one LEAP-1A, two CF34-10s, four CF34-8s, two CFM56-5C, one Trent 700, one PW4060 and one CF34-3B.

As of July 23, 2018, the portfolio had a remaining lease term of approximately 19.6 months, with approximately 2.9% of the portfolio initially not subject to a lease. The 18-year old 737-800 is leased to Scandinavian Airlines based in Sweden with an initial age of 17.6 years and a remaining lease term of 2.3 years. The portfolio has an initial value of approximately $466.8 million, with an aggregate maintenance-adjusted current market value of approximately $454.4 million.

For this latest transaction, the issuer has adopted the single-waterfall structure in WEST IV that enforces a sequential-pay structure in downside scenarios, which is becoming a more standardised feature of aviation ABS structures.

Although Willis has a core focus on spare engine leasing, the company also acquires aircraft on short leases to realise the value from the engines and related parts on the aircraft. Currently, the company owns and leases seven 737 aircraft, three ATR turboprops, and four A320 aircraft.

Eleanor Steed
By Eleanor Steed August 9, 2018 14:47