HEH launches another Embraer 175 end-fund

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HEH Aviation Dublin Beteiligungsgesellschaft, the German fund arranged by Hamburger EmissionsHaus (HEH), has acquired an Embraer 175 aircraft from UK regional operator Flybe under a 10-year sale-and-leaseback transaction.

The 88-seat aircraft (MSN 17000358) was delivered new to Flybe in December 2013.

HEH, which says in a prospectus the aircraft was purchased for $26.7 million, has approached the equity market to fund the delivery.

The prospectus shows annual distribution starts at 7.5% and are scheduled to increase to 10% in 2024, 12% between 2025 and 2029, and 15% between 2030 and 2031, the final year. Total distributions are projected at 241%, including sale proceeds, during the term.

The total investment volume totals €22.8 million ($30.5 million), of which €13.9 million is equity and €8.9 million debt.

HEH plans to sell the aircraft for $11.4 million at the end of the 10-year term, the prospectus shows.

The transaction marks the second time the German fund has acquires an E175 aircraft from the UK regional carrier. In January 2013, it purchased another 88-seat aircraft (MSN 17000355) for $26.4 million. The aircraft was delivered new to Flybe in December 2012. NordLB provided the debt portion in the transaction.

HEH Aviation Dublin is the 16th end-fund for HEH.

The company also manages three Bombardier CRJ1000 end-funds, which lease the aircraft to Air Nostrum under 10-year operating leases as well as 11 Bombardier Q400 end-funds, which are leased to Flybe under an operating agreement with an initial term of 10 years and an option to extend for two years.