The good, the bad and the ugly: the shape of things to ... - AviTrader

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Leasing News Aircraft and engine finance Financing future fleets THE RECORD ORDERS FOR AIRCRAFT AND ENGINES that came out of the major industry shows this year, as well as massive commitments such as Lion Air’s $21.7bn order for 230 Boeing 737 Max and NG jets late last month, leave us with at least two certainties: Airbus and Boeing will continue to keep their production rates high and growing throughout 2012 and beyond - and that these new orders must be paid for somehow. And therein lies a niggling doubt: Europe’s biggest banks have been traditional sources of finance for eager buyers, but the stillunresolved Eurozone sovereign debt crisis, coupled with the Basel 3 standards on capital exposure agreed by the world’s banking establishment a year ago, mean many airlines and operatorswill have to look elsewhere. US airframer Boeing recently said that it expected the global value of aircraft deliveries in 2012 to top $95bn, rising to $106bn in 2013, up from $77bn this year. Kostya Zolotusky, managing director at Boeing Capital, the airframer’s financing arm, said earlier this month that he did not foresee a funding shortfall in 2012. Capital markets should provide funds of up to $10bn next year for aircraft purchases - more than double the $4bn they put up in 2011, he said, accounting for 10% of total funding. Export credit agency financing, from institutions like the US Export-Import Bank, should remain steady at 30%, while com- LATEST LEASING NEWS Willis Lease Finance closes new and expanded revolving credit facility for $345m Willis Lease Finance Corporation closed a new revolving credit facility. The $345m credit facility, with an interest rate equal to LIBOR plus 2.75%, is available to Willis Lease on a revolving basis for five years through November 2016. The credit facility is provided by a syndicate of banks led by Union Bank, N.A., as Administrative Agent, Joint Lead Arranger and Sole Bookrunner, Wells Fargo Bank, National Association as Syndication Agent, Wells Fargo Securities, LLC as Joint Lead Arranger, and U.S. Bank, N.A., as Documentation Agent and Joint Lead Arranger. This credit facility and other credit facilities support the company and its subsidiaries in financing its lease portfolio which stood at $961m as of September 30, 2011. Jackson Square Aviation closes $265m credit facility Jackson Square Aviation (JSA) closed a $265m secured credit facility, which provides the company with committed long-term debt capacity. This facility provides JSA with a vital financing source to acquire modern, fuel-efficient aircraft for lease to its airline customers. JSA will finance eight aircraft currently owned or in its committed pipeline, for delivery through 2012. The facility is structured and arranged by Crédit Agricole (the Arranger) and fully underwritten by the Arranger and Siemens Financial. This transaction brings JSA’s total committed credit facility capacity to approximately $900m. ALC announces proposed offering of $300m of convertible senior notes Air Lease Corporation intends to offer $300m aggregate principal amount of convertible senior notes due 2018 in an offering exempt from registration under the Securities Act of 1933, as amended the “Securities Act”). In connection with this offering, the Company expects to grant the initial purchasers of the Notes an option to purchase up to an additional $45m aggregate principal amount of the Notes. The Notes will be offered only to qualified institutional buyers in reliance upon Rule 144A under the Securities Act. The Notes will pay interest semi-annually and will be convertible at the option of the holder into shares of the Company’s Class A common stock. The Notes will mature on December 1, 2018, unless earlier repurchased or converted. DVB Group reports operating performance during third quarter of 2011 For the third quarter 2011, DVB reported a 21.2% increase in net interest income after allowance for credit losses, of €162.1m. At €106.4m, consolidated mercial bank lending will dip to 21% from 25% this year. Zolotusky expects a quarter of deliveries will be funded in cash both this year ($19bn) and next ($24bn). Some analysts have suggested that aircraft financing will be significantly more challenging in years to come, and indeed, that some airlines could struggle to secure financing for their mega-orders next year and beyond. Kostya Zolotusky Boeing But Zolotusky said he was confident that aircraft orders in 2012 would be secure, as airlines seek different sources of financing and make greater use of leasing companies. Echoing Boeing’s bullishness, Charles Willis, president and CEO of Willis Lease, told AviTrader MRO that he believed there will be additional funding available for all types of companies seeking finance for aircraft, engines and spares - from Export Credit Agencies (ECAs), equity / mezzanine fund providers and lessors - including his own company. Only last month, Willis closed a new $345m credit facility with a syndicate of US banks to support the financing of its lease portfolio, which stood at $961m at September 30th. “I am sure there will be many more of these types of credit agreements to come,” he added. net income before taxes decreased by 10.7% year-onyear, primarily due to volatile net income from financial instruments in accordance with IAS 39. Total income (comprising net interest income after allowance for credit losses, net fee and commission income, net income from financial instruments in accordance with IAS 39, results from investments in companies accounted for using the equity method, and net other operating income/expenses) declined by 1.8%, from €241.6m to €237.3m. Net interest income rose by 23.7% year-on-year, to €181.3m, and net interest income after allowance for credit losses was up 21.2%, from €133.8m to €162.1m. New Transport Finance business totalled 109 transactions as at 30 September 2011, with an aggregate volume of €3.3bn (9m 2010: 93 transactions with a volume of €3.0bn). SAS secures finance lease facility of SEK 500m for four existing A321s SAS secured a five-year refinancing of four Airbus 321 to a total value of approximately $74m (SEK500m). Nordea is the Agent and Deutsche VerkehrsBank AG (DVB) is the Security Trustee in the transaction. The transaction is part of SAS ongoing aircraft refinancing program where loans maturing in 2011/ 2012 are to be renewed. The financing of two aircraft will close in Q4 and the remaining will close in Q3 2012 and Q4 2012, respectively. 16 AviTrader MRO - December 2011
Jet Values 2 Whether you require up-to-date lease rates, current or forecast market values or simply aircraft specifications, Jet Values 2 delivers comprehensive data on over 23,000 commercial aircraft in service. Jet Values 2 is delivered through an intuitive, user friendly online portal, giving you true flexibility and ease of use. With monthly aircraft updates, and semi-annual value updates, you can be sure that the information and opinion provided is up-to-date. In addition, Jet Values 2 also offers the added functionality of online access to IBA’s trade publications. Benefiting from IBA’s market information collected from more than two decades, Jet Values 2 enables you to search by specific serial number, registration or aircraft type to determine: • Current Base and Market Values, and Current Market Lease Rates • Forecast Base, Market and Soft Values, and Forecast Base Lease Rates • Full-Life Valuations and detailed Specification Adjustments • Current and Forecast Portfolio Valuations • Total User Control over Fleet Management The system also delivers total flexibility on the model, specification, length of forecast, inflation parameters, and a choice of Excel or PDF outputs. “IBA’s JV2 online valuation system is an exceptional tool for the analysis of existing and potential aircraft, aircraft fleet values and for conducting ‘what if’ scenario analysis. The Excel outputs are easy to use; the data is constantly updated; and one is confident that the values and rates are based on expert knowledge and common sense.” Shane Miller Commonwealth Bank Call: +44 (0) 1372 224488 marketing@ibagroup.com www.ibagroup.com www.jetvalues2.com IBA Group Ltd IBA House 7 The Crescent Leatherhead Surrey KT22 8DY United Kingdom
Page 1 and 2: AviTrader MRO December 2011 - www.a
Page 3 and 4: Editor‘s Page 3 The good, the bad
Page 5 and 6: Industry News 5 Sabena technics use
Page 7 and 8: Largest aftermarket WheeL and Brake
Page 9 and 10: Cover Story - 2012: The MRO Outlook
Page 15: Cover Story - 2012: The MRO Outlook
Page 19 and 20: News in Brief TP Aerospace wins sev
Page 21 and 22: News in Brief SELECTED FINANCIAL NE
Page 23: Industry People on the Move 23 AFTE

The good, the bad and the ugly: the shape of things to ... - AviTrader

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