Helicopter lessor Milestone Aviation Group announced today that it has successfully completed the private placement of $575 million of senior secured notes. The company intends to use the proceeds to fund the continued expansion of its business and to refinance existing debt. Seventeen investors, 16 of which are new to Milestone, participated in the private placement. The deal positions Milestone “to continue delivering for our operating partners for years to come,” said company president Daniel Rosenthal.
Financing, Insurance and Taxes » Aviation Financing
Issues regarding financing of aircraft.
Airlines will continue to enjoy ready access to financing for new aircraft acquisitions, as funding sources such as bonds grow in importance as options for financial support, according to Boeing’s seventh annual aircraft finance market forecast. The report, released in London on December 10, said that while export credit agency funding will decline in significance in the coming years, the industry will see a more even balance among carriers’ use of bonds, leases and loans from banks and capital markets.
Traditional measures point to a recovery in the economy in general, but the business aviation sector has yet to enjoy it. On the up side, credit has loosened somewhat for newer aircraft, as lenders find niche markets for themselves. For many buyers, however, cash remains king.
With 36 A380 aircraft in the fleet as of late September and a further 104 now on order, the aviation community is trying to calculate what will happen to Emirates’ superjumbo fleet when the time comes to retire the type, at around halfway through its lifetime. Some analysts believe that, given a lifespan of 25 years, a proxy for the useful life of a modern widebody aircraft, the A380 will face problems in the secondary market when major leases come to an end after the standard 12-year term.
The dynamism of today’s airliner leasing business was illustrated earlier this year by the creation by German investment company Doric GmbH of a separate entity, Doric Lease Corp. (DLC), to manage the assets.
Students of human psychology need look no further than the fable of the tortoise and the hare to understand the situation today in the region’s leasing sector. In the waning years of the boom, a number of new entrants made valiant plays, but some appear to have had to pause to reconsider. Despite the aviation boom in the Middle East, few new major regional entrants into this esoteric business have come into existence and, of those that have, the 2008 bust clearly had a major negative impact.
Fast-growing Russian leasing group Ilyushin Finance Co. (ILC) is targeting the Middle East market with a portfolio of five airliners that could exploit the increasingly blurred lines between traditional regional air transport fleets and new-generation narrowbodies.
Air BP secured the first major Asia-Pacific client for its global fuel card when it signed a deal this week with Beijing-based aircraft management and charter operator Deer Jet. Under the agreement, Air BP is providing its Sterling Card for each of Deer Jet’s 62 business jets. The card’s “independent oil company status” will allow Deer Jet to purchase aircraft fuel worldwide. Further, Sterling Card benefits include 24/7 support from the global Air BP out-of-hours team, which provides response service for queries and access to its interactive paperless electronic invoicing system.
VLJ activity has rebounded strongly in Europe, at the expense of traditional light jets such as Citations and Learjets, according to speakers at the annual Business Aircraft Europe event, held at London Biggin Hill Airport on September 11 and 12. The event grew out of Light Jets Europe, which started in 2007 but was renamed after the VLJ (very light jet) sector nosedived with much of the rest of the industry when the global financial crisis hit five years ago.
Helicopter leasing firm Milestone Aviation Group announced yesterday at HeliTech a multi-year framework agreement to purchase an unspecified, but “significant,” number of AgustaWestland AW139s, AW169s and AW189s.
These aircraft will enter service worldwide in support of Milestone’s lessees serving offshore oil and gas transportation services, aeromedical transport, search-and-rescue operations, para-public and other utility missions.