World Star Aviation has priced its aviation freighter-focussed asset-backed securitisation deal (ABS), Sprite 2026-1.
The $495 million deal marks World Star's third ABS deal and its first concentrated on next-generation cargo freighter aircraft.
The deal has three tranches, including two subordinate notes. The repayment date is expected to be March 2033 and the legal final maturity date is March 2041.
The $370 million series A notes have a coupon of 5.227% and a yield of 5.285%, with a spread of Treasuries plus 165 basis points. The series has a loan to value (LTV) ratio of 64.3% and a weighted average life (WAL) of 4.8 years.
Fitch and KBRA have given the tranche an A rating.
The $55 million B notes have a coupon of 6.211% and a yield of 6.292%, with a spread of 265 basis points. The tranche has an LTV of 73.8% and WAL of 4.9 years. The tranche has been rated BBB by both ratings agencies.
The $70 million C notes has a coupon of 9.413% and a yield of 9.600%
The C notes are structured to receive partial cash sweeps at closing until redemption date, with six months of interest prefunded at closing.
The C tranche has an LTV of 86% and a WAL of 4.0 years. Fitch rated the tranche BB-, while KBRA assigned it with no rating.
The A and B tranches have a 10-year mortgage-style amortization, while the C tranche is 14 years.
Proceeds will be used to acquire a portfolio of 30 assets, including 28 converted freighter aircraft and two narrowbodies on lease to 17 lessees in 16 jurisdictions. One of the 28 converted freighters includes one narrowbody that has been contracted for conversion to freighter.
The weighted average age of the portfolio is around 22.3 years, and 3.5 years for freighter aircraft post-conversion. The weighted average remaining term of the initial lease contracts is around 5.4 years.
The aircraft are all 737-8s and 737-800s variants.
Mizuho Securities acted as sole structuring agent and lead bookrunner. MUFG acted as liquidity facility provider and UMB Bank is the security trustee.