Since the second quarter of 2016, Apollo Aviation Group has contracted to purchase 27 commercial aircraft and five aircraft engines for a total gross purchase price of $750 million. All flight equipment is being purchased with leases attached to airlines in the Americas, Europe and Asia Pacific.
The 27 aircraft are comprised of 21 narrowbody and six widebody from the Airbus A319, A320, A321 and A330, and the Boeing 737-800 and B737-900ER families. The vast majority of aircraft (96%) are in-production.
Also, since the second quarter, Apollo Aviation transitioned a leased Boeing 737-800 aircraft from one European carrier to another. Furthermore, it extended 10 leases for its aircraft, including one A319-100 in the UK, four A330-300s in the US, three for A330-200s in Asia, and two B737-800s in France.
Robert Korn, Apollo Aviation’s President stated, “The attractive value proposition of our fleet has meant we have been able to successfully extend ten leases, including seven of our widebody aircraft, with the result that we have pushed out our fleet’s significant remarketing events until 2018. We have also continued to grow our airline customer base, adding an additional three lessees in the third quarter which confirms the continuing demand for our expanding mid-life fleet.”
On Friday, November 18, Apollo Aviation Securitization Equity Trust 2016-2 closed $640 million of asset backed secured term loans comprised of the following principal amounts and effective initial yield: $515 million of Class A loans at 4.25%, $85 million of Class B loans at 6.00%, and $40 million of Class C loans at 8.00%.
This is the third ABS transaction for Apollo Aviation since 2014 and is being deployed to acquire additional aircraft. Since 2014, Apollo Aviation’s securitizations (for which Apollo Aviation is not the issuer) have issued or borrowed in aggregate more than $1.7 billion in asset backed secured debt.
Commenting on the latest ABS, Korn explained, “It provides us with permanent financing in a very efficient structure. What is unusual about the current environment is that we are at a historic point where mid-life aircraft are still the in-production models. This has not been the case in the past, and as a lessor of these aircraft, it creates an attractive market opportunity for us.”Date: December 1, 2016