SKY Leasing, a leading aviation investment manager, announced the successful closing of a significant $569.640 million secured notes offering. This financing will fuel the acquisition of a carefully curated portfolio of 22 Airbus and Boeing aircraft, valued at approximately $825 million. The aircraft portfolio, boasting an average age of 4.8 years and a weighted average lease term of 7.3 years, features a strategic focus on narrowbody aircraft (88%) and next-generation aircraft (70%).
The notes offering, comprised of one series of $569.540 million Series A Notes with an interest rate of 5.335%, attracted a diverse range of global investors, exceeding expectations with a 2x oversubscription. This strong demand underscores the attractiveness of SKY’s portfolio and its ability to structure compelling investment opportunities.
The Series A Notes, carrying an initial loan-to-value ratio (LTV) of 69.0%, garnered an A2 rating from Moody’s Investors Service and an A (sf) rating from Kroll Bond Rating Agency. They have an initial expected maturity of 7 years and an initial expected weighted average life of 5.25 years.
SKY, acting as the servicer for SLAM’s aircraft portfolio, anticipates using a portion of the proceeds to refinance its existing warehouse debt financing facility. The transaction involved a collaborative effort with several financial institutions: MUFG and Deutsche Bank served as joint lead structuring agents and joint lead bookrunners; BofA Securities acted as joint structuring agent and joint lead bookrunner; BNP PARIBAS, Citigroup, Fifth Third Securities, Morgan Stanley, PNC Capital Markets LLC, and SOCIETE GENERALE acted as joint bookrunners. Natixis stepped in as the liquidity facility provider.
Matthew Crawford, Co-Chief Investment Officer at SKY, expressed his enthusiasm for the transaction’s success, emphasizing the broad investor interest and its validation of SKY’s strategic approach. “We are thrilled that the SLAM portfolio attracted a diverse, global group of investors, resulting in 2 x oversubscription. This broad distribution validates our ability to construct attractive portfolios with thoughtful structuring for our debt partners,” said Crawford. “The success of this transaction underscores SKY’s investment approach, enabling us to continue providing efficient capital solutions to our airline customers and delivering high-quality portfolios to our investment partners.”
The transaction reflects SKY Leasing’s ongoing commitment to delivering innovative capital solutions to airlines worldwide. This latest financing further strengthens their position as a leading player in the global aviation industry, driving growth and providing value for both their airline customers and investors.
