Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced that Titan Aircraft Investments Ltd., a joint venture of its Titan Aviation Holdings, Inc. subsidiary and Bain Capital Credit, has entered into a US$300 million warehouse financing agreement with a subsidiary of Caisse de dépôt et placement du Québec (CDPQ), a global institutional investor, and BNP Paribas as joint lead arrangers and lenders. Titan Aircraft Investments has also separately entered into a US$200 million bridge financing agreement with volofin Capital Management being the sole lender and arranger.
The warehouse facility will provide debt capital to finance the acquisition of freighter aircraft leases by Titan Aircraft Investments and the bridge facility will provide debt capital to finance the conversion of passenger aircraft into freighter configuration.
“We are excited to partner with CDPQ, BNP Paribas, and volofin on these key financing facilities,” said Michael T. Steen, President and Chief Executive Officer of Titan Aviation Holdings and Executive Vice President and Chief Commercial Officer of Atlas Air Worldwide. “These facilities will enable Titan Aircraft Investments to serve the strong market demand for freighters and airfreight capacity, supported by the rapid expansion of express and e-commerce networks worldwide.”
“By partnering with best-in-class air cargo solutions provider, Titan Aviation, as well as leading aviation lender, BNP Paribas, and investor, Bain Capital Credit, we have the opportunity to leverage our deep knowledge of the evolving transportation and global ecommerce sectors with our capacity to craft innovative financing structures,” said Martin Laguerre, Managing Director, Capital Solutions, CDPQ. “This investment is well aligned with our Capital Solutions strategy to create tailored solutions backed by high-quality assets in great demand by strong counterparties, such as global freight aircraft lessors, and to achieve attractive risk-adjusted returns.”
“It has been great to work with the Atlas and Titan teams on this project,” added Stewart Tanner, Senior Managing Director, volofin Capital Management. “volofin has used its extensive market knowledge and experience to create a bespoke and innovative structure to allow Titan the flexibility it needs within the bridge facility to both acquire and convert in-demand aircraft.”
Titan Aviation Holdings and Bain Capital Credit formed the joint venture in December 2019 to develop a diversified freighter aircraft leasing portfolio with an anticipated value of approximately US$1 billion. The long-term joint venture aims to capitalize on demand for cargo aircraft, underpinned by robust e-commerce and express market growth. Under the joint venture, Bain and Titan have committed to collectively provide US$400 million of equity capital to acquire aircraft over the next several years, which may be supplemented with additional commitments over time. Titan is also providing aircraft- and lease-management services to the venture.
The air cargo industry plays a very important role in the global economy, fueled by accelerated demand for e-commerce and express services. Titan Aircraft Investments is well-positioned to contribute to the growth of the global freighter fleet.