Airfinance Journal's 2018 deals of year winners were selected by a judging panel of nine senior aviation finance executives from the airline, finance, legal and manufacturing sectors.
More pictures of the 2018 winners can be found here.
The winners of Airfinance Journal's global finance awards at the Metropolitan Club in New York on 2 May 2019 include:
Asia-Pacific Deal of the Year: Macquarie AirFinance’s “Project Melville” – a $4bn unsecured revolver and term loan
This large non-recourse aircraft secured portfolio term loan represented the refinancing of the Macquarie AirFinance entire business moving to a wholly independent funding structure.
Europe Deal of the Year: Nordic Aviation Capital’s $227m Jolco financing for 12 Embraer 190s
This transaction marked the first ever lessor Jolco financing for regional jets and features the first ever cross-collateralisation within a lessor Jolco structure. It also represented the largest regional aircraft Jolco.
Latin America Deal of the Year: Avianca’s UKEF guaranteed Jolco financing for one Boeing 787 aircraft
This transaction was Avianca’s first UKEF-backed Jolco financing. It was also the first UKEF-guaranteed financing structured as part of a Jolco for a Latin American carrier.
Middle East & Africa Deal of the Year: Ethiopian Airlines’ $670m AFIC supported financing for eight Boeing aircraft
Ethiopian Airlines became the first African carrier to raise financing through the Aircraft Finance Insurance consortium (AFIC) structure. The financing also marked the first AFIC structure with a commercial junior debt.
North America Deal of the Year: Zephyrus Aviation Partners’ ZCAP 2018-1 $336.6m 21 aircraft ABS transaction
This transaction involved a newly-launched leasing platform acquiring a substantial portfolio of mid-life aircraft directly into an asset-backed securitisation (ABS) structure.
Global Product Awards:
Bank Loan Deal of the Year: Novus Aviation Capital’s limited recourse financing of four Boeing 777-300ERs on lease to British Airways
This deal represents the first direct order by Novus with an OEM as well as the first 777 lessor order since 2014. Financing is through a senior secured limited recourse facility provided by MUFG and BNP Paribas.
Export Credit Deal of the Year: Aeromar’s ECA-guaranteed loans financing for eight ATR aircraft
Aeromar closed one of the most innovative transactions featuring takeout of manufacturer financing with export credit agencies support for turboprop aircraft into Mexico.
Islamic Deal of the Year: DAE Capital’s $800m revolving credit facility
This facility, which features an accordion to grow the size to $800 million, is atypical. It features a conventional tranche of debt combined with an Islamic tranche, the first of its kind amongst lessor financings.
Tax Lease Deal of the Year: Virgin Australia’s $120m Jolco financing for six used Boeing 737-800 aircraft
The deal features many firsts: mid-life aircraft assets, new Jolco name as well the combination of financing complex assets in local currency for debt and US dollars for equity.
Operating Lease Deal of the Year: airBaltic’s $72.4m sale and leasebacks of two A220-300s
This deal also has many firsts: First open market sale and leaseback transaction for the type, first sale and leaseback for Airbaltic, first purchase and ease back for the type for Avation, Euro-denominated lease rentals.
Structured Lease Deal of the Year: Smartwings’ Euro-equivalent of $140 million AFIC supported financing of three 737 Max 8s
This financing represents the first time the Czech carrier had used the AFIC-supported financing product. It was also the first time an Irish structure has been used for an airline AFIC deal.
Engine Deal of the Year: Willis Lease Finance Corp’s WEST IV $373.4m ABS for 55 engines
The $373.4 million 144A transaction was the largest engine financing of the year. It features a large pool of engines and one 737-800 airframe.
Used Aircraft Deal of the Year: Air Canada’s 25 Embraer 190 sale and leasebacks
This transaction accelerated Air Canada’s phase out of its E190s in advance of its A220 deliveries. It involves short leaseback periods and the formation of a joint venture between Beautech and Nordic Aviation Capital.
Equity Deal of the Year: Azul’s $315m secondary equity offering on behalf of Hainan Airlines Holdings
This airline’s transaction, on the back of its $644m IPO in 2017 allowed ownership diversification: 55% of the offering was allocated to new investors.
M&A Deal of the Year: Goshawk Aviation/Sky Leasing acquisition and $900m unsecured financing
This acquisition accelerated Goshawk’s already fast growth trajectory with 17 new lessees as well as giving Goshawk the necessary scale for an investment grade rating.
Restructuring Deal of the Year: Bocomm Leasing’s $200m French Tax Lease for seven Boeing aircraft
This transaction is unique given that it is arguably one of the first French leases combined with a PRC SPC Onshore Leasing Structure, to be refinanced.
Lessor Unsecured Bond Deal of the Year: Avolon’s $1bn five-year senior unsecured notes
This issuance was upsized from an initial target volume of $750 million and priced at 5.125%, benefitting from improved market sentiment following the announcement of the ORIX 30% stake acquisition transaction.
Airline Unsecured Bond Deal of the Year: Delta Air Lines’ $1.6bn unsecured notes
Delta’s investment-grade corporate rating reflects the company’s modest leverage, its ability to consistently generate positive and sizeable free cash flows, and its market position as one of the leading network carriers in the US.
ABS Deal of the Year: GECAS STARR’s 2018-1 $687m ABS financing for 24 aircraft
This transaction brought a new development into the asset-backed securitisation (ABS) market last year: the first aircraft ABS transaction to utilise a 144A Tradeable E-Note.
News Event Deal of the Year: Boeing-Embraer Partnership
This transaction will see Boeing holding 80% of a joint venture for Embraer’s commercial aircraft operations, while Embraer will own the remaining 20%. It will be a great response to the Airbus-Bombardier A220 partnership.
Airline of the Year: Southwest Airlines
Airfinance Journal selects its Airline of the Year on a 100% objective and quantitative basis using data from The Airline Analyst. The parameter used is Return on Total Capital. The winner for 2018 is Southwest Airlines, which generated a phenomenal 27.6% Return on Total Capital. During the year it returned $2.3 billion to shareholders in the form of stock buy-backs and dividends.
Overall Capital Markets Deal of the Year: Air Lease Corp’s TBOLT II $450m ABS for 18 aircraft
This transaction incorporated a ground-breaking 144A tradeable E-note. Thunderbolt II was the first aircraft ABS Deal to use a Passive Foreign Investment Company (PFIC) tax structure that facilitates off-shore ownership and removes tax related transfer restrictions.
Innovative Deal of the Year: Spirit Airlines’ $160m PDP financing for 43 Airbus A320neo aircraft
This transaction featured a large pool of assets. This facility allows the borrower drawdown and repayment flexibility. As direct borrower, Spirit is free to decide how much it wants to draw, repay or redraw, subject only to pre-agreed maximum amounts as determined by the aggregate PDP payments. The PDPs paid in by Spirit serve essentially as the borrowing base for the facility.
Editor’s Deal of the Year: Fly Leasing’s & Incline’s 84-aircraft portfolio acquisition
Of the 84-aircraft portfolio, 79 aircraft are leased back to AirAsia and its affiliates. This transaction was described as a ‘game changer’ for Fly Leasing as it exposed the lessor to new narrowbody technology aircraft.
Overall Deal of the Year: ORIX Aviation’s $2.2bn acquisition of a 30% stake in Avolon
“We’re buying into the business plan that Avolon has set out and we want Avolon to keep growing, increase in value and reach investment grade. That’s very much our target for the investment,” said ORIX Aviation.
Airline Treasury Deal of the Year: AirAsia Group
AirAsia Group treasury and aircraft finance team had a very busy year. In addition to managing the AirAsia Group Berhad group of airlines operations, the team handled two major aircraft divestment portfolios:
- M&A process of project Aladdin, or sale of a large portfolio to Fly Leasing; and
- M&A process of project Alibaba, or sale of a medium size portfolio to Castlelake.
Lessor Treasury Deal of the Year: BOC Aviation
In 2018 BOC Aviation was active in the loan and bond markets, with many issuances under its Global Medium Term Note programme. It maintained a strong level of liquidity and ended the year with a debt to equity ratio of 3.0 times. BOC Aviation achieved a very attractive overall debt cost in 2018 at 3.3%, based on the average of opening and closing debt. This reflects the strength of the credit, the strong investment grade ratings, the treasury team’s experience and the tapping of different markets and tenors in size.
Aviation Finance House of the Year: BNP Paribas
BNP Paribas picks up the award this year for delivering a spectrum of financing solutions as well as creativity across many financing structures. The bank particularly seemed to punch above its weight in the asset-backed securitisation (ABS) and debt capital markets. BNP Paribas was involved in over $50 billion of aviation sector transactions with 30 capital market deals, 17 revolving credit facilities as well as 51 aircraft financings.
Lessor of the Year: Avolon
Avolon made the headlines in early 2018 because of the HNA Group, which had been trying to liquidate assets and raise capital in a bid to reduce debt. Despite this, Avolon continued to push ahead. It ensured continuity in the business with a high level of activity and ended the year placing an order for 100 A320neo aircraft, becoming Airbus’ largest lessor customer by number of aircraft. The ORIX Aviation acquisition of a 30% stake in Avolon, was a turning point. Since then it has been a smooth road and this is a testament to its chief executive officer Domnhal Slattery and his team.
Aviation Finance Persons of the Year: Robert Korn and Bill Hoffman of Carlyle Aviation Partners
Robert and Bill have been the architects of the rise of Apollo Aviation Group (now Carlyle Aviation Partners) since its inception in 2002. In late 2017, they took full control of Apollo and in October 2018, the Carlyle Group agreed to acquire 100% of Apollo from them. Independently of the ownership change the company had an impressive year. According to Airfinance Journal’s Fleet Tracker, the company was the most active buyer in 2018 with a total of 83 aircraft for an estimated $1.6 billion by market value. Last year, the company also launched two asset-backed securitisations AASET 2018-1 and AASET 2018-2 with proceeds exceeding $1 billion. The refinancings involved about 60 mid-life aircraft.
Lifetime Achievement Award: Dick Forsberg