Farnborough Air Show

GECAS Announces Portfolio Sale and Financing Agreement

 - July 18, 2018, 4:30 AM
Under a recently signed debt-financing deal GECAS company PK AirFinance will finance PAL's acquisition of four Airbus A321-200neos.

GE Capital Aviation Services (GECAS) and Oz Management have closed on an aircraft portfolio purchase, STARR 2018, structured with the inclusion of a dedicated asset manager for equity investors. The transaction will allow GECAS to sell a portfolio of aircraft to Start Ltd., which is financing the acquisition through 144A debt and equity. The portfolio includes 24 in-production Boeing and Airbus aircraft. The aircraft are on lease to 16 airlines in 15 countries with a total appraised value of approximately $700 million. A multi-year agreement between GECAS and an Oz affiliate will allow the affiliate to serve as an asset manager for current and potential future transactions.

“This structure provides GECAS, as a seller, and buyer/issuers like START Ltd. with access to the institutional market on a more consistent basis. We look forward to teaming up with Oz on similar aircraft sales transactions going forward,” said Alec Burger, president of GE Capital and president and CEO of GECAS.

GECAS, together with Novus Aviation Capital, has also announced a debt financing agreement with Philippine Airlines (PAL). A GECAS company, PK AirFinance, will provide senior debt for the acquisition of four Airbus A321-200neos. A mezzanine loan for each aircraft will be extended through Novus’s Tamwheel Aviation Finance. The loan will finance PAL’s acquisition and aid PAL’s efforts to develop more medium-range routes along with modernizing its fleet. The first aircraft was delivered in May and the remaining three are expected to deliver before the end of 2018.