JULY 30TH, 2015
AWAS and Kahala close $260,750,000 Aircraft ABS Notes
Dublin based aircraft lessor, AWAS, announced today that Diamond Head Aviation 2015 Limited (the “Issuer”) has closed a $260.75m Fixed Rate Asset-Backed Notes offering, comprised of US$199,250,000 of 3.81% Class A Fixed Rate Asset-Backed Notes (“Class A Notes”) and US$61,500,000 of 5.92% Class B Fixed Rate Asset Backed Notes (“Class B Notes”). The Issuer also offered subordinate Class E Notes representing the equity interest in the Issuer (together with Class A Notes and the Class B Notes, the “Notes”), which were purchased by Kahala Ireland Investments DAC, an affiliate of Kahala Aviation Holdings, LLC.
The Class A Notes and Class B Notes were rated A and BBB respectively by S&P and by Kroll. The Notes are backed by a portfolio of 30 aircraft (the “Aircraft”) which the Issuer will acquire from AWAS. The Aircraft comprise a mix of narrowbody and widebody jet aircraft that, as of May 1, 2015, had an average age of 16.41 years and were leased to 16 lessees based in 14 countries. AWAS (Ireland) Limited will act as servicer with respect to the Aircraft.
Proceeds from the sale of the Aircraft to the Issuer will be used by AWAS to refinance existing indebtedness and for general corporate purposes.
“The breadth of distribution as well as the tight coupons on the Class A and Class B Notes is testimony of the success of this ABS debt placement. AWAS is very pleased to have concluded this portfolio disposition to the Kahala Group via our first ABS transaction at a price which provides our company with the opportunity to reinvest the proceeds, net of debt repayments, to fund further aircraft acquisitions” said Simon Glass Chief Financial Officer, AWAS.
“With new borrowing capacity from our two Unsecured Revolving Credit Facilities recently closed and this ABS transaction, we continue to proactively widen AWAS’ sources of funding and to expand the company’s investor base” added Frederic Mireur, Head of Corporate Finance."
Brad Smith, Managing Director of Kahala Aviation Group Ltd., commented: “ the closing of Diamond Head represents a milestone in the 11 year history of Kahala providing us with a substantially larger balance sheet going forward, our first investment in widebody aircraft and increased exposure to some of the world’s top flag carriers.”
Wells Fargo Securities acted as sole structuring agent and joint bookrunner of the transaction. MUFG, RBC Capital Markets and Credit Agricole Securities acted as Joint-book runners.
Clifford Chance US LLP advised AWAS, Hughes Hubbard & Reed LLP acted as counsel to Wells Fargo and the other initial purchasers of the Notes and Vedder Price P.C. advised the Kahala Group.