Exclusive: Bank aviation book sale reaches next round | News | Airfinance Journal

Exclusive: Bank aviation book sale reaches next round

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The sale of a commercial aviation book by an established lending institution is moving to the next stage, sources confirm to Airfinance Journal.

Airfinance Journal can reveal that National Australia Bank (NAB) is reviewing exposures to aviation and has unofficially offered a portion of its offshore commercial aviation book for sale.

One banking source says the first round attracted eight “serious” bids from the investment community, some of which have an aviation background.

The estimated $2.3 billion offshore aviation book has exposure to airlines and leasing companies.

About 95% of the book is secured lending while the remaining 5% is unsecured, one source says.

Airfinance Journal understands that NAB hopes to mandate parties by the end of this year.

NAB says that in light of the impact of the global pandemic on travel and aviation industries, the bank is currently reviewing its exposures to offshore commercial aviation.

“We are considering options to de-risk a portion of our offshore commercial aviation portfolio. This is prudent risk management,” a spokesperson at the bank tells Airfinance Journal.

In late October sources told Airfinance Journal that higher loan-to-values (LTVs) and the fear of a sustained deterioration of airline credits could be pushing some banks out of aircraft finance.

In October, Airfinance Journal revealed that Dutch lender ABN Amro, reportedly with less exposure to the market, was leaving the commercial aviation sector.

Airfinance Journal is aware of one European bank that is ceasing its commercial aviation activity and another that is stepping out of deal origination.

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