More European carriers could tap the capital markets for secured aircraft financing in 2016.
“A number of well known [European] names see the benefit of the capital markets,” said one lender close to the capital markets at the ISTAT Americas conference in Phoenix.
While they decline to name names, they point to non-investment grade airlines with significant capital needs.
The potential list does not include investment grade EasyJet, Lufthansa Group and Ryanair, nor previous EETC issuers British Airways and Turkish Airlines, they confirm. Norwegian has also issued two private EETCs.
Possible airlines that fit this description include Air France-KLM, Iberia or Wizz Air.
New issuers from Europe could make up some of the forecast $6 billion to $8 billion in EETC issuance in 2016.
Regular issuers American Airlines and United Airlines are expected to issue the bulk of the new debt this year. The former closed the first deal of the year in January, its $1.07 billion 2016-1 notes for 22 aircraft.
Lenders say Delta Air Lines could issue a EETC. However, it could also tap the unsecured market buoyed by its new investment grade rating.
BA is a possible EETC issuer in 2016. But lenders note that they are “well financed” though they could still close a deal.
Lenders say Turkish is unlikely to tap the market again in 2016 after its inaugural $328 2015-1 million deal in March 2015 due to increased country risk. Turkey has a negative outlook from both Moody’s Investors Service and Standard & Poor’s (S&P).
New EETC issues from other regions of the world are less likely. Latin America’s economic issues would weigh heavily on any potential deal and Asian airlines remain a potential but little expected possibility in 2016, lenders say.
Emirates could tap the market again. However, nothing is immediately anticipated.
Source: Cirium Dashboard
