JP Lease Products and Services and Stratos Aircraft Management have launched a $554 million ABS, the first to include a Japanese operating lease (JOL) structure.

JOL Air, as the transaction has been named, will raise funds to acquire 15 aircraft, including 13 narrowbodies and two widebodies. The portfolio has a weighted average aircraft age of 4.0 years and a weighted average remaining lease term of 8.3 years, a presale report from Kroll Bond Rating Agency (KBRA) shows.

The deal consists of three tranches: $456 million A notes, $74 million B notes and $24 million C notes. Stratos, which is acting as servicer, will initially purchase a minority proportion of the class C notes but will not be retain any of the equity, KBRA says. The equity is expected to be held by JOL investors.

In its report KBRA explains that the aircraft owning entities will lease the aircraft to a Japanese SPV, held by JP Lease, under finance leases. The SPV will then lease the aircraft under operating head leases to intermediate lessors, which will, in turn, lease the aircraft to the lessees under operating leases. JP Lease will enter into silent partner arrangements with the equity investors.

Goldman Sachs is lead structuring agent and lead left bookrunner while Deutsche Bank is also a structuring agent and joint bookrunner. Natixis is liquidity facility provider, while JP Lease is the JOL arranger and managing agent.

Source: Cirium Dashboard