Operating lessor AWAS believes it is too early to call whether the Aircraft Sector Understanding is having an impact on export credit agency demand for aircraft financing.
"It's a little bit early, when we're only four months into the 2011 ASU taking effect, to start saying that it is making no difference or that there is an impact because you can get much higher...advance levels...so people are just going to continue to use it, and there won't be a fall in the amount of ECA/Ex-Im (US Export-Import Bank) financing," said Simon Glass, chief financial officer of AWAS on an earnings call.
Aircastle's executive vice president of capital markets Roy Chandran indicated last week that ECA deals remain a popular choice as borrowers can finance the increased fees under ASU by taking out larger loan amounts.
"Regardless of the fact that you might be paying eight or 10 points up front - you can fund that. And given where our funding levels have stayed, on an amortised basis, it doesn't really translate to a substantial increase in pricing if you're holding the asset until the end," says Chandran.