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Crunching the numbers
01 December 2007
Despite volatility in the capital markets, bankers are feeling positive. Sophie Segal went to New York to find out what they think of the airfinance market and what they expect for the year ahead.
Read more:
capital markets
EETCs
subprime
capital markets
oil prices
consolidation
Southwest
Northwest
What goes up must come down. This simple law of physics can also been applied to the financial markets, which were doing well earlier this year, especially in the airfinance sector. Deals were getting done and several enhanced equipment trust certificates (EETC) and aircraft portfolio securitizations were closed. Then came the summer.
The sub-prime mortgage crisis began and the first write-offs started to roll in. Several banks reported significant losses and chief executive officers took on most of the blame. Luckily, the airfinance market was one of the last to be hit by the credit crunch, which allowed some last-minute deals to take advantage of the market while it was still tolerant.
The reality is that although the industry fundamentals might be looking healthy, the capital markets are unstable and investors are nervous. While some deals closed during September and October, others were delayed because the terms offered by the...
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