Leading aircraft lessors are seeking outside capital in unprecedented amounts to fund their aggressive portfolio expansions.
Boullioun Aviation Services typifies the new trend. In the past it would occasionally privately place part of a single plane transaction with an outside financier. Otherwise it relied on parent Sumitomo Trust and Banking to fund fleet acquisitions. Last September Boullioun closed its first multi-aircraft financing for US$163 million. Now it is back in the market for twice that amount.
Joel Hussey, Boullioun's CFO, expects to complete negotiations within the month with Chase Manhattan Bank to underwrite an estimated $322 million syndicated loan covering 12 aircraft. 'This is obviously because of our expanding portfolio,' says Hussey, referring to Boullioun's orders or deliveries of 20 aircraft within the past year. As a joint venture partner in Singapore Aircraft Leasing (SALE) Boullioun is also committed to 18 other new aircraft, including six B777s.
International Lease Finance Corporation recently sold US$200 million in unsecured notes to cover part of its growing fleet orders. Even though ILFC has access to the cash of its parent, American Inter-national Group, and has used AIG in the past primarily as a guarantor, it is now securing credit in its own right. GE Capital Aviation Services sources external capital through its parent by obtaining commercial borrowing as a unit of GE Capital Services.
The only major lessor currently not tapping the capital markets is Ansett Worldwide Aviation Services. Awas is still due some aircraft, but has not ordered any more recently.
Source: Airline Business
