Talk about the capital markets as a reliable source of aircraft funding is premature despite recent financings by the lessor community, says a US-based private equity source.
"Don't believe the hype that the capital markets will in any way solve the funding shortfall presented by the retreat of certain European financiers. A lot of open issues remain, preventing the capital markets from taking up a meaningful slice of aviation finance," he says.
Capital markets financings are usually centred around "rated entities, which are good credits and operate pristine equipment, so this closes a lot of doors," he says.
In addition concern about whether the "US is in full-blown recovery is also weighing down the outlook" for such financings. But, he notes this "trepidation can be felt outside of aviation and across other asset classes as well."
"No doubt, lessors got in some good deals recently but that in no way suggests the door for capital markets financings is wide and open for aviation."