BOC Aviation to tap private market this year

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Operating lessor BOC Aviation is expected to tap the private placement market again this year for another $250 million, according to its chief executive officer Robert Martin.

In an interview with Flightglobal, Martin says BOC Aviation closed a $50 million bond issue in January in Taiwan. "We tapped the market at a 4.3% coupon for 10-year unsecured debt. We think we can issue another bond this year in the private market for another $250 million in 2013."

The lessor has been aggressive in the capital markets recently. In September 2012 it launched it $2 billion euro-denominated medium term notes programme.

In April, the lessor tapped the market with $350 million in 10-year senior notes, yielding 4.401% at a spread of US treasuries + 270 basis points (bps).

Last week BOC Aviation reopened its bond issue for another $150 million, increasing the total issue size to $500 million. The new notes yielded 4.265% at a spread of US treasuries + 263 bps. The transaction was executed within five hours.

Martin explains that Taiwanese life insurance companies invested in both transactions.

He says BOC Aviation has planned one benchmark issue every year in the $350-400 million range.

BOC Aviation has 50 deliveries scheduled for this year through a combination of its order pipeline with Airbus, Boeing and Embraer and 25 purchase and leaseback transactions signed last year.

"All of this year's deliveries are funded," says Martin. "We are now starting to look at our 2014 fundings," he adds.