Avolon to use ABS proceeds to reduce debt

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

Operating lessor Avolon Aerospace will use the proceeds from its $636 million asset-backed securitisation (ABS) transaction to pay down debt and reduce its debt maturity profile.

The deal closed on 16 October.

Avolon says it remains open to tap the market again in the future but a transaction depends on the market conditions.

Also, Avolon's board of directors says it has not mandated an investment bank for a potential sale, indicating an initial public offer is not on the cards yet.

Emerald Aviation Finance issued $546 million class A-1 notes, priced at 4.65% a coupon, while the $90.2 million class B-1 notes, priced at 6.35% to acquire 20 aircraft from Avolon. The lessor will retain all equity interest in the 20-aircraft portfolio.

Avolon has raised $5.1 billion of debt since launching in May 2010, including $1.7 billion this year.

The lessor says the closing of the ABS is a further “significant step” in the continued diversification of Avolon’s capital structure. “Avolon’s inaugural ABS transaction is a key milestone in the diversification of our sources of capital and marks our entry into the public debt markets. Avolon continues to demonstrate strong access to capital, having raised $1.7 billion of debt capital in 2013 year to date, across public and private markets,” says chief financial officer Andy Cronin.