Avolon, I Squared Capital and ADIA Establish Constellation Aviation with $1.4 Billion Aircraft Portfolio

Avolon has agreed to establish Constellation Aviation, a new aircraft leasing investment platform formed in partnership with I Squared Capital and a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA).

Upon completion of the transaction, Constellation is expected to acquire an initial portfolio of 22 aircraft from Avolon with a current market value of approximately $1.4 billion. The portfolio has an average aircraft age of five years and is leased to 17 airlines across 15 countries.

The joint venture will combine institutional investment capital from I Squared Capital and ADIA with Avolon’s aircraft origination, leasing and asset management capabilities. Avolon will retain a minority equity interest and serve as the platform’s exclusive aircraft manager and servicer.

Constellation is intended to expand over time, targeting investment opportunities in modern commercial aircraft as airlines increasingly rely on leasing to support fleet renewal and expansion amid constrained aircraft production capacity.

The transaction will be supported by a syndicated debt facility arranged by a group of international banks. BNP Paribas, Crédit Agricole CIB, Société Générale, ING, MUFG and Mizuho are acting as joint lead bookrunners, with Mizuho also serving as financial advisor to the investors.

Milbank is providing legal counsel to the investors, while Clifford Chance is advising Avolon.

Completion remains subject to regulatory approvals. The companies did not disclose the joint venture’s ownership percentages, equity commitments, debt facility size or expected closing date.