First Star Aviation, a new lessor formed by New York-based Fifth Street Finance to focus on mid-life aircraft, has completed the purchase of three Boeing 757 aircraft on lease to United Airlines.
The three 1991-build aircraft (MSNs 24994, 25019, and 25130) will be managed by Kahala Aviation Leasing.
Fifth Street provided First Star with debt and equity capital to finance the purchases.
Pradeep Hathiramani, former principal and sector head of transportation at KKR Asset Management, has been appointed to lead the leasing business as a managing director.
Hathiramani says: "Fifth Street's established underwriting platform and access to capital provides significant competitive advantages as we execute our acquisition strategy and seek to take advantage of high quality opportunities, particularly among mid-to-end of life aircraft.
"By focusing on mid-age aircraft, we intend to help fill the financial void in underserved segments of the market. We plan to use a disciplined and value-oriented investment approach to acquiring aircraft and leasing them out on long-term charters to carriers around the world."
Ivelin Dimitrov, Fifth Street's chief investment officer, says: "We believe the rapid growth of the leasing industry is poised to continue as financing costs for aircraft are rising and large banks and European financial institutions are scaling back lending activities due to new regulatory and liquidity constraints, including Basel III."
Hathiramani will help build an aviation team focused on acquiring and leasing a portfolio of commercial aircraft to operators around the world.
He has more than 15 years of lending and leasing experience in the transportation industry. Most recently, he was responsible for originating and managing a portfolio of leveraged loans, high yield and mezzanine investments at KKR. Prior to that, he spent seven years at GATX Financial as director of the aircraft leasing group.