Castlelake, L.P., a global private investment firm and experienced leader in aircraft ownership and servicing, has priced a structured ABS financing: Castlelake Aircraft Structured Trust 2017-1 (CLAS 2017-1). CLAS 2017-1 totals USD 785.5 million of asset-backed debt and will be used to finance a fleet of 43 aircraft, the company said.
The structured ABS includes a delayed draw mechanism designed to minimize interest costs during the ramp up period of the structure.
CLAS 2017-1 is comprised of three tranches: USD 616 million Class A loans with a fixed coupon of 3.967% yielding 4%; USD 90 million Class B loans with a fixed coupon of 5.926% yielding 6%; and USD 79.5 million Class C loans with a fixed coupon of 6.899% yielding 7%.
The weighted average yield across the structure is 4.5%. The Class A loans have an initial loan-to-adjusted base value (LTV) of 65.5% and have been rated A by Standard & Poor´s (S&P) and Kroll Bond Rating Agency (KBRA). Class B loans have an initial LTV of 75.1% and are rated BBB by S&P and KBRA, and the Class C loans have an initial LTV of 83.5% and are rated BB by S&P and BB- by KBRA. More information is available at https://www.krollbondratings.com/show_report/7124.
With the completion of CLAS 2017-1, funds and investment platforms managed by Castlelake have issued approximately USD 3 billion in aircraft ABS since beginning the program in 2014. Since inception through March 31, 2017, these funds and investment platforms have invested in more than 440 aircraft and 950 engines across multiple aircraft and engine types. Castlelake offers full aircraft and engine leasing services and specializes in creative, flexible solutions for mid- to end-of-life aircraft and engines. The Castlelake Aviation team is comprised of professionals with extensive experience in sourcing, underwriting and technical management.
Castlelake will act as servicer for the transaction. Deutsche Bank Securities, Inc. and Citigroup Global Markets Inc. acted as joint structuring agents for the transaction. Goldman Sachs and BNP Paribas acted as joint lead arrangers. Natixis S.A. serves as liquidity facility provider.
Castlelake, L.P. is a global private investment firm focused on investments in alternative assets, sub-performing loans, dislocated industries and corporate special situations, and is an experienced leader in aircraft ownership and servicing. Castlelake´s team comprises more than 100 professionals with deep expertise, located in Minneapolis and London. Castlelake manages private funds with more than USD 10.3 billion in assets, on behalf of endowments, foundations, public and private pension plans, private funds, family offices, insurance companies and sovereign wealth funds.