Irish legislation update aims at facilitating EETC deals

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The Irish government has drafted a new bill that paves the way for greater access to capital, including through the capital markets..

The new bill, the Shannon Aviation Services and Miscellaneous Provisions Bill 2013, will also provide the necessary legal mechanism to allow Ireland to adopt a new insolvency regime in relation to aircraft and aircraft engines, equivalent to the regime known as "Alternative A" under the Cape Town Convention.

Ireland's minister for transport, tourism and sport Leo Varadkar says the legislation will provide "greater certainty" to investors in the event of a default. The move should also "facilitate" the issuance of Enhanced Trust Equipment Certificates (EETCs) in Ireland to bolster its position as a "user friendly and leading jurisdiction for aircraft finance and leasing", he says.

Operating lessor Avolon says in a statement it "welcomes" the change to legislation.

"This represents a significant positive development for airlines and aircraft lessors and will enable greater and more cost-effective access to international capital for companies based in Ireland," says the lessor.

Dómhnal Slattery, Avolon's chief executive officer, says: "While we acknowledge the importance of today's announcement, it is critical that Ireland remain committed to protecting and enhancing its recognised position as the world's leading market for aircraft finance. We cannot become complacent at a time when many of the world's leading financial centres are working to replicate our success and challenge the leading global position that Ireland has achieved in this sector."