Banks want more than financing requests from airline customers: Natixis

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With crises more frequent, and fewer available financiers, existing lenders to the aviation market are looking for airline partners who bring more to the table than just a financing request.

"It's about developing a five-10-year relationship with an airline and building trust over time. This is done with advisory roles, fuel-hedging services and other business in addition to financing," says Christian McCormick, head of aviation finance, Natixis Transport Finance.

This evolving relationship between client and financier has resulted in some of Natixis' airline customers making US dollar deposits with the bank to help ease the greenback funding pressures in the European market.

"In some cases when an offer goes out, we require that a deposit be made in New York. The offer is only valid if the airline agrees to do the deposit," he says. "The deposit is usually short-term compared to the loan, which is long-term. But the deposit acts as fuel for a bank to complete its transformation role in the economy".

Natixis is not the only bank seeking US dollar deposits from their clients.

Guggenheim Partners chief executive Steve Rimmer says he is aware of lenders asking for dollar deposits from their borrowers as well.

The banks, in turn, are making the move attractive in terms of deposit rates, "so it's not just a 'grab' it's a genuine attempt to address a real issue proactively," he says.

McCormick adds: "The request for a deposit is a catalyst, it is up to the bank's treasury department to offer competitive rates to ensure the deposit is renewed when the initial term of the deposit is up."