Investec Bank’s globally recognised aviation finance arm has announced the successful closing of a $1bn operating lease transaction with Emirates Airline, the world’s largest operator of the Airbus A380 and Boeing 777 aircraft.
The $1bn transaction has facilitated the delivery and sale and leaseback of four A380-800s, the world’s largest passenger jet, to Dubai-headquartered Emirates over the past four months. The aircraft involved are of 2013 and 2016 vintages. Investec has acquired the 2013 vintages aircraft from Stellwagen Finance, the holding company for Aviation Finance Company (AFC). The 2016 deliveries are new deliveries direct from Airbus.
Investec acted as the sole arranger for both the financing and leasing elements of this transaction. Financings are provided by banks and institutional investors across Middle East, Europe and Asia. Investec has also put in place Islamic financing on two of the deliveries.
Investec is recognised as one of the leading aviation banks worldwide, and this deal establishes Investec as a foremost provider of A380 operating leases to one of the world’s top commercial airlines.
Aircraft financing is seen by many as an attractive investment opportunity in the current low yield environment, supported by the low price of oil, air passenger growth and demand for aircraft. Investec’s deal with Emirates offers exposure for investors for a 12 year period on brand new aircraft with top tier credit.
Nirmal Govindadas, Senior Vice President Corporate Treasury for Emirates, commented:
‘Emirates’ clear long-term financing strategy and our solid reputation in the financial community enables us to secure funding in the global market to grow our fleet of wide-bodied aircraft. We are pleased to close the sale and lease back agreement for four A380s with Investec Aviation Finance, and we will continue to tap into innovative funding opportunities, maintaining our well-diversified financing portfolio to support our growing fleet.’
Alok Wadhawan, co-head of Investec Aviation Finance, commented:
‘The past 12 months has seen Investec Aviation achieve a number of important milestones. The closing of the $1 billion A380 aircraft deal with Emirates highlights our expertise and deep sector knowledge, and the quality and range of financing products and bespoke solutions we can provide to airlines and lessors. Top-tier credit for a 10/12 year period demonstrates how attractive aircraft financing is for both investors and companies seeking financing.’
Investec is an active lender and lessor in the aviation market with a balance sheet available to a global client base. Investec Aviation Finance has c. US$5bn of aircraft assets under management through its own balance sheet and managed funds. In addition, Investec owns a 20% stake in Dublin-based Goshawk, along with Chow Tai Fook Enterprises and NWS Holdings. Goshawk is a joint venture leasing platform set up by Investec in 2013, with an owned or committed portfolio of 75 young, in-production aircraft, valued at approximately $3.2bn.