Airbus Financial Services has sold three A380s on lease to Singapore Airlines to Doric Asset Finance at a base purchase price of $198.6 million each, marking the first A380 financings to be completed. The aircraft were previously on Airbus’ books.
The purchase price includes buyer furnished equipment costs. The 2007 list price for an Airbus A380 is $305.8 million.
The first aircraft, MSN003, is financed under a 10-year German operating lease to the Singapore carrier. Financing sources familiar with the deal suggest the lease rate is $1.7 million per month.
SIA has the option to extend the term for two additional years.
German bank Nord LB is providing debt through a 12-year loan, an equity bridge, and an extra back-up facility. Equity distribution will be with Dr Peters, which will source the funds from individual German investors.
Commenting on the transaction, Mark Lapidus, MD, Doric Asset Finance says: “The financing model is based on fixed leasing rates and fixed debt and gives investors a sizeable cash flow, an attractive return and is not affected by fluctuations in the stock market.”
Aircraft MSN005 and MSN006 will be acquired under a similar financing structure. The first aircraft will be delivered on 11 January while the other aircraft will be delivered at the end of the month.
Two more SIA A380s are due to be financed in the coming months. Doric will participate in both financings. All five aircraft will have a base purchase price of $198.6 million.
The financings are a boost for Airbus, given these are A380s which are new aircraft assets with unknown residual values, while these particular aircraft are among the first ones off the line and could be trickier to remarket than later deliveries due to weight and wiring differences.
But Lapidus says he is confident with the initial A380s. “This so-called wiring difference on the first 24 aircraft is actually just a different production method. What was essentially a software difference between different Airbus plants meant that the earlier models were partly wired manually. This won’t affect performance; it just alters how quickly Airbus can assemble the aircraft.”
He adds: “SIA reports a 100% track record with the aircraft in service, which is practically unheard of for a new aircraft type. The long production process is now paying off.”
Certain Emirates A380s have also been mandated for financing. HSH Nordbank has been mandated for the financing of one aircraft. The carrier also mandated Natixis Transport Finance for Islamic financing; however, that mandate is expected to be renegotiated because of A380 delays.
Source: flightglobal.com's sister premium news site Commercial Aviation Online