China Aircraft Leasing (CALC) has started its first aircraft investment sidecar, which is backed by three unidentified Chinese state-owned enterprises.
CALC will hold a 20% stake in the portfolio, named CAG, with the remainder held by the three ‘mezzanine financiers’, and act as the servicer, a stock exchange disclosure states.
Those financiers are comprised of an insurer, an asset management company and an aviation conglomerate. That makes it likely that the latter investor is a unit of aircraft and component manufacturer AVIC.
The lessor and two of the mezzanine financiers have also agreed to provide a $365 million loan to CAG. CALC states that, including the loan, its initial investment in the sidecar is around $73 million. CAG will raise additional debt from the bank market, the disclosure adds.
The vehicle's portfolio is expected to grow to between $1.15 billion and $1.4 billion. It will initially acquire 12 Airbus A320s, four A321s and two Boeing 737-900ERs from CALC, which have an average age of 1.2 years and an aggregate average remaining lease term of 9.6 years.
“The successful launch of CAG represents an important step forward in CALC's transition into an asset-light business model, which increases our aircraft asset under management, and hence further strengthens the Group’s position as an aircraft full value-chain solutions provider for the global aviation industry,” says CALC chief executive Mike Poon.
He adds that the vehicle is a “replicable financing channel that supports vast capacity in the future through efficient turnover on our capital.”
Source: Cirium Dashboard