The fact that some of the biggest export credit agencies (ECA) for aircraft are closed for business will mean that the private placement will grow for aviation companies, according to the executive managing director, Burnham Sterling & Company.
Speaking on a private placement panel at the 37th Annual North America Conference in New York, Michael Dickey Morgan said: “The fact the ECAs are closed for Boeing and Airbus is creating an interest in the manufacturers to push the alternative sources of funding. For example, private placements that can be explored with potentially new issuers and create new volume with them.
“I don’t know what will happen with the ECAs in 2017, but if they stay closed, it will likely create a higher volume of private placements than it would do if they were open again.”
Michael Dickson, managing director at Citi, who was also on the panel, notes that there are more innovative structures being brought to the private placement market now, such as Class C EETCs and different types of deals that more traditional insurance companies in the US have a “difficult time doing.”
“Traditionally, we saw 50-60 insurance companies doing these deals but now we’re seeing a lot more interest from investors that didn’t traditionally invest in the private placement space. As we roll out some more of these deals, the market will bring more and more unorthodox investors,” he adds.
From left to right: Andrew Kleerman, managing director, Barings; Michael Dickson, managing director, Citi; Rafael Kuhn, director, Deutsche Bank; Michael Dickey Morgan, executive managing director, Burnham Sterling; Marjan Riggi, managing director, Kroll Bond Ratings Agency.
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