Nordic Aviation Capital (NAC) wants to increase the firepower of its revolving credit facility (RCF) from $350 million to up to $750 million, says its senior vice-president, global treasury, Jan Rosencrone von Benzon.
In an interview with Airfinance Journal he reveals that NAC’s $350 million RCF features an accordion to raise its capacity.
“We will look to increase its size to between $500 million and $750 million. This is the natural size for this type of facility,” von Benzon says.
He says the pricing is “very attractive” but declines to disclose the terms of the deal.
“The gap between the unsecured and secured transactions is narrowing and we decided to tap this market as part of our natural evolution,” he comments.
As NAC grows in size it needs to diversify funding sources and tap the unsecured market, adds von Benzon,
“The public rating assigned in January and the subsequent upgrade by Kroll to now BBB+/BBB attracted lots of interest from the financing community and we opted to pursue unsecured-basis financing rather than secured deals,” he says.
“The unsecured financing provides NAC with additional operational flexibility over the traditional senior secured financing.”
The initial credit facility was arranged by Citi Global Transportation Banking and was supported by BNP Paribas, Credit Agricole, and Deutsche Bank.
The proceeds will be used to refinance aircraft as well as support future acquisitions.
The three-year facility will rank pari passu with all other unsecured indebtedness of the borrower.
Clifford Chance acted as NAC’s legal counsel while Cahill Gordon & Reindel acted as the initial lender’s counsel.
NAC could tap the unsecured market again: “Given the size of our business, we will continue to monitor market developments in the future,” says von Benzon.
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