Wednesday 13 December 2017

Avolon raises $675m debt facility

Domhnal Slattery
Domhnal Slattery
John Mulligan

John Mulligan

Avolon, the Dublin-based aircraft leasing firm led by Domhnal Slattery, has secured a new $675m (€625m), eight-year debt facility. It's the single largest debt facility ever obtained by the firm.

The company's chief financial officer Andy Cronin described it as a "milestone" for the firm. The finance will be used to acquire up to 21 aircraft.

Avolon, which floated on the New York Stock Exchange last December, said six banks in Europe and Asia-Pacific were involved in the debt finance. Bank of Ireland Corporate Banking was among the lead arrangers. It's the first time that the bank has been a lead arranger in one of Avolon's debt facilities.

Apart from being used to help fund upcoming aircraft deliveries, the facility will also be used to refinance existing debt at Avolon.

The new debt is incremental to undrawn debt of $920m the company had at the end of March.

Avolon said the fresh finance gives it "significant flexibility", including an availability period of up to 15 months, and capacity to finance up to three aircraft acquisitions that had not been identified at the time of securing the new debt.

The debt carries a margin of just 1.65pc, which Avolon said reflected the "strong demand" from financial institutions for the transaction.

The company had originally intended to raise $500m (€461m) as part of the new debt raising.

"This facility is consistent with our stated strategy of funding the business with low cost, long-term debt," said Mr Cronin. Other banks involved in the deal include The Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, Commonwealth Bank of Australia, HSBC and Natixis.

Irish Independent

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