Irish Stock Exchange plans to list aviation debt in new departure
THE Irish Stock Exchange (ISE) said it will create a dedicated exchange for aviation-related debt as airlines and lessors increasingly look beyond banks for funding. Ireland is one of the world's biggest hubs when it comes to aircraft leasing.
The exchange will trade aviation-related debt and other instruments. The ISE said it aims to be an international hub for aviation finance assets, capitalising on the aviation industry's growing demand for non-traditional sources of finance.
At present, this is mainly provided by commercial banks but capital markets are a growing source.
They accounted for $15bn (€11bn) or 15pc of the total requirement in 2013. That compares with a share of just 4pc in 2009.
Chief executive Deirdre Somers said the new exchange would capitalise on Ireland's already world-leading position in aviation finance as well as the ISE's expertise in debt listings; its other forays include the launch of a European wholesale securities market with the stock exchange of Malta in 2012.
"We want to combine these skills to make Ireland even more attractive for aviation issuers and investors" she said, adding that Ireland was also home to two of Europe's best-known airlines in Ryanair and Aer Lingus.
"Investors and issuers around the world are familiar with Ireland's expertise in aviation and it makes sense to build on that."
Ireland has a highly developed aviation finance industry.
Half of all the world's leasing activity is managed from this country, whose foothold in this market was developed with the founding of Guinness Peat Aviation in the 1970s.
The country offers a network of law firms, stockbroking houses and other advisers skilled in aviation finance.
There are already 26 aviation-related debt instruments listed on ISE markets, with a total value of $12.7bn.
These include a $636m asset-backed security from Irish-founded leasing company Avolon and bonds of more than $1bn associated with Emirates.