GECAS is working with Och-Ziff Management on a new securitisation structure to create a more liquid market for third-party equity buyers of aircraft asset-backed securities, FlightGlobal understands.
As with a typical ABS, the debt would be sold to bond investors, with GECAS managing the aircraft and Och-Ziff buying part of the equity, which is being structured with features that will make it more liquid, says a source familiar with but not involved in the deal.
In order to attract additional equity investors, Och-Ziff would manage the equity vehicle for a fee, providing information to investors unfamiliar with aircraft assets – about lease rates, for instance.
Another source with knowledge of the deal says that the new structure could make raising third-party equity for ABS deals more efficient, adding liquidity and allowing lessors to generate higher prices when they sell aircraft portfolios.
Deutsche Bank and Citi have been hired to structure the deal, sources confirm. FlightGlobal further understands from several sources that Deutsche Bank has also been hired to sell the E-Note that Och-Ziff purchased in connection with BOC Aviation's $747 million securitisation SHNTN 2015-1.
GECAS declined to comment and Och-Ziff did not immediately respond to a request for comment.
Last month, GECAS chief executive Alec Burger told an audience at the ISTAT EMEA conference in Edinburgh that "ABS is one of the most efficient ways to sell aircraft".
GECAS priced a $709 million ABS in December 2016, with South Korea's Meritz Securities paying $210 million to purchase the E-note through a fund formed by Korean Investment Trust Management.
Och-Ziff, which has $32 billion in assets under management, was one of the original investors in Macquarie AirFinance when the bank agreed to acquire GATX Air in 2006, but divested during the global financial crisis because of other liabilities outside of aviation.
Source: Cirium Dashboard