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Back to basics
01 December 2007
The credit crunch might be affecting liquidity levels, but airfinance banks are going back to basics in order to get through the storm. Janet Du Chenne reports.
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credit crunch
liquidity
banks
debt
The year 2007 will be remembered for two different halves. The first half started well, with record liquidity levels and the capital markets playing a dominant role.
Then, in June, came a threatening monster known as the sub-prime mortgage collapse. At the time, few could fully predict the impact this would have on the airfinance market. But aviation lenders have had time to reflect and, while liquidity levels are not what they used to be, several lenders are adopting a back-to-basics approach that should see them through the wider financial downturn.
According to Michael Weiss, structured finance at Investec, some banks are less likely to underwrite large transactions and are more likely to do club deals.
"We have also seen an increase in pricing to cope with an increase in the in the cost of funds, and credit committees are less keen about the marginal deals," he says. What is...
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