Dublin | 20 February, 2020: Avolon Holdings Limited (“Avolon”), the international aircraft leasing company, announces that Sapphire Aviation Finance II LLC and Sapphire Aviation Finance II Limited (collectively, the “Issuers“ or “SAPA 2020-1”), newly established special purpose companies, closed a total of US$620 million of Fixed Rate Notes (the “Issue”).

The issue will comprise:

  • US$490 million of 3.228% Series 2020-1 A Fixed Rate Notes due 2040 (the “Series A Notes”) issued at a 3.250% yield;
  • US$86 million of 4.335% Series 2020-1 B Fixed Rate Notes due 2040 (the “Series B Notes”) issued at a 4.375% yield; and,
  • US$44 million of 6.779% Series 2020-1 C Fixed Rate Notes due 2040 (the “Series C Notes”) issued at a 6.875% yield (collectively, the "Notes").

The notes are rated:

FitchKBRASeries AA sfA (sf)Series BBBB sfBBB (sf)Series CBB sfBB (sf)

Additionally, Sapphire II Limited (the “Certificate Issuer”) offered equity certificates representing the equity interest in SAPA 2020-1 (the “Equity Certificates”), with LibreMax Capital, LLC selected as the anchor investor and Avolon acquiring a minority share.

The Notes are backed by a portfolio of 21 aircraft (the “Portfolio”), with an appraised value of $746.8 million, which will be acquired by SAPA 2020-1 from Avolon using the proceeds of the issuance. The Portfolio comprises a mix of 21 narrowbody and widebody aircraft that have a weighted average age of 7.5 years and are on lease to 19 lessees/airlines based in 18 countries. Avolon will act as servicer with respect to the Portfolio and any additional aircraft acquired by the Issuers.

Dómhnal Slattery, CEO Avolon commented: "This transaction follows the successful launch of our Sapphire vehicle in 2018 and we are particularly pleased with the yield for this issue, which is the lowest debt yield of any aircraft ABS issuance over the last decade. Investor demand for this issue reflects our standing in the capital markets and further builds on Avolon’s reputation as a leading ABS servicer.”

The Notes and the Equity Certificates are being offered in the United States to persons reasonably believed to be qualified institutional buyers in an offering exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to persons outside of the United States in compliance with Regulation S under the Securities Act. The Notes and the Equity Certificates have not been registered under the Securities Act, or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

This press release is not an offer to sell or a solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.

Mizuho Securities USA LLC and Deutsche Bank Securities Inc. acted as Joint Lead Structuring Agents & Joint Lead Bookrunners. Credit Agricole Securities (USA) Inc. and MUFG Securities Americas Inc. acted as Joint Lead Bookrunners, with BNP Paribas Securities Corp. and Morgan Stanley & Co. LLC also acting as Joint Bookrunners for the transaction. Natixis Securities Americas LLC acted as a Co- Manager.

Clifford Chance US LLP advised Avolon, the Issuers and the Certificate Issuer, and Milbank LLP acted as counsel to the initial purchasers.