Copying and distributing are prohibited without permission of the publisher
Instruments of choice
01 September 2007
The debt markets may be on shaky ground, but this does not stop airlines from taking advantage of a range of products to finance their fleets. Bankers share their thoughts on which structures are most popular and how they will fare in the coming years.
Read more:
WestLB
BNP Paribas
ING
Calyon
Natixis
Airfinance Journal: What products have the most traction and why do people use them?
Eric Eugene, global head of aviation finance, BNP Paribas: Securitizations. With capital markets benefiting from liquidity, these financings were attractive because of embedded diversification and the overall acceptable risk parameters. Users found attractive pricing and a willingness of markets to provide – through tranching – high advance rates and amortization profiles that are not as conservative as bank debt would generally require. Non-recourse bank debt with asset risk also has traction. A number of aircraft financiers have increasingly moved towards taking more asset risk and are working with operating lessors on this.
Jose Abramovici, global head of aviation and rail finance, Calyon: The main reason why airlines use leasing structures are firstly, 100% financing; secondly, the potential cash upfront upside when entering into sale and leaseback; thirdly, the smooth cash flows and the residual value exposure taken by...
Access to this content is denied because you are not logged in. Please login to view this content
Already have an account?
Subscribe
Subscribers have unlimited access to all current and archive content. Start your
subscription today - click on the button below.
Free trial
Taking a free trial will give you access to the current issue for two weeks (excluding
some surveys and articles). Start your free trial today.
