The first all-turboprop asset-backed securitisation (ABS) has priced, FlightGlobal understands.
Elix Aviation Capital's $411 million Prop 2017-1, a three-tranche deal, attracted investors from the USA, Europe and Asia, including banks and insurers.
The $300 million A tranche priced at 5.375%, and the $57 million B tranche at 7.25%, says a source close to the deal. The $54 million C tranche priced at 9.75%.
Kroll Bond Rating Agency lists coupons on the respective tranches as 5.3% for the A tranche, 6.9% for the B tranche and 9.55% for the C tranche.
Proceeds from the ABS will be used to purchase a fleet of 63 turboprops, including Bombardier Dash 8s, ATR 42s and ATR 72s. The aircraft have a weighted average age of about 9.7 years and a weighted average lease term of five years remaining, and they made up 82% of the Dublin lessor's leased fleet as of 31 December 2016.
KBRA remarked in it pre-sales report that the deal had to be enhanced because of its unique all-turboprop asset make-up.
"To mitigate the risks associated with concentrated aircraft transactions in one aircraft category, as well as the overall age profile of the aircraft, the transaction features structural enhancements such as lower initial leverage, cash-sweep mechanisms and performance triggers," the agency noted.
DVB Bank is liquidity provider, while Elix is acting as servicer. FlightGlobal understands that Deutsche Bank and Citi are also both working on the deal.
Elix had about $680 million-worth of assets under management as of 31 December.
It has not responded a request for comment.
Source: Cirium Dashboard
