Marathon Asset Management has issued its second asset-backed securitisation (ABS) deal, MAST 2026-1. The deal is the inaugural aviation ABS serviced by Orix Aviation. Additionally, four aircraft within the ABS will be serviced by Airborne Capital or Arena Aviation Capital, both acting as sub-servicers.
The $613.180 million deal includes a subordinate B tranche. Marathon will retain the equity at closing. The deal has an expected repayment date of February 2033 and a legal final maturity date of 2051.
The A tranche totals $552.88 million and has an initial loan to value (LTV) ratio of 71%. The tranche is expected to be rated A by KBRA and Fitch.
The $62.3 million B tranche has an LTV of 79%. The tranche is expected to be rated BBB by KBRA and A- by Fitch.
Proceeds will be used to acquire a portfolio of 27 narrowbodies on lease to 18 lessees in 15 jurisdictions. The weighted average age of the portfolio is around 9.5 years. The weighted average remaining lease term for the portfolio is 5.8 years.
The portfolio includes 13 Boeing 737-800s and three 737 MAX 8s, as well as eight A320 family jets, three A320neo aircraft, and one A220-300.
With the MAX 8s, A320neos and the A220, the portfolio has six new technology aircraft in the portfolio or 29.5% by value. The weighted average age of the new technology aircraft is 4.8 years and the remaining lease term is around 6.9 years.
The top three lessees represent 32.5% of the portfolio by value. This includes Spring Japan at 12.3%, LOT Polish Airlines at 10.3%, and LATAM at 9.8%. The top three countries in the deal represent around 33.4% of the portfolio’s value. This includes Japan at 12.3%, the US at 10.8% and Poland at 10.3%.
A $2 million security deposit will be funded at closing. Excess on the deposit will be used to cover senior expenses and shortfalls in interest and principal on the notes.
The deal also includes a liquidity facility sized to nine-months of interest due on the Class A notes.
Deutsche Bank is sole structuring agent and left lead bookrunner.
UMB Bank is security trustee on the deal and Natixis’ New York Branch is the liquidity facility provider.