Global Jet Capital (GJC) has come to the LABACE show (Booth 1012) to offer the Latin American market access to its leasing and lending options for business jet transactions. The U.S. based company was launched in late 2014 with an initial $2 billion of funding with the backing of three investment firms, GSO Capital Partners, The Carlyle Group and AE Industrial Partners.
The company offers a range of operating and interim leases, finance leases and mortgage loans, progress payments and mezzanine financing (a mix of debt and equity financing) for both new and previously owned business jets. Its target market is aircraft valued at $30 million and higher, including pre-owned aircraft around three-to-five years old.
According to executive director Shawn Vick, GJC’s main focus is transactions involving midsized, super-midsized, large-cabin and long-range jets. While recent years have been challenging times for the values of pre-owned aircraft, Vick believes that the low-point in the market has passed for aircraft in these categories. One factor, beyond current aircraft values, is the apparent recovery in flying activity.
“In the operating lease business, residual values of aircraft is critical over periods of 5 to 10 years, and so it has been our policy to be very prudent and thoughtful [over which transactions to support],” Vick explained.
That said, GJC considers more than just the residual values of aircraft when evaluating prospective deals. “We are quite confident in our understanding of the asset and market and where we are in the cycle,” he told AIN. “It is also important to understand the jurisdictional issues you are going into, thinking about the care, custody and control of the aircraft, and who is going to manage it. These are the things we have to be thoughtful about.”
Since GJC’s launch it has put in place lease agreements for several Gulfstream G650 jets. It is now evaluating potential deals involving various Embraer, Bombardier, Dassault Falcon and Airbus aircraft with clients across different regions of the world. “By leasing the aircraft they want, clients can put the money [they would have allocated to buy them outright] back into their businesses,” explained Vick, pointing out the benefits of keeping aircraft off company balance sheets.
The company’s executive committee boasts a wealth of business aviation experience. In addition to Vick, who has formerly held senior positions with various companies including Hawker Beechcraft, Gulfstream, Bombardier, GJC also has Bill Boisture, formerly with Hawker Beechcraft, Gulfstream and NetJets, is an executive director. Also on the committee is David Rowe, founder and managing partner at AE Industrial Partners and formerly an executive vice president with Gulfstream Financial Services and GE Capital.
“We see an opportunity in the market because the traditional sources of financing such as the banks [have taken] a step back, and others have placed significant hurdles in the lending process, so the provision of lease financing or debt financing has proved to be challenging,” Vick said.
Last December GJC signed an MOU with the African Business Aviation Association (AfBAA) under which it became “a preferred provider of finance solutions for AfBAA members seeking financing for private aircraft.”