Castlelake, L.P., a global private investment firm and experienced leader in aircraft ownership and servicing, today priced a structured ABS financing: Castlelake Aircraft Structured Trust 2017-1 (CLAS 2017-1). CLAS 2017-1 totals $785.5 million of asset-backed debt and will be used to finance a fleet of 43 aircraft. The structured ABS includes a delayed draw mechanism designed to minimize interest costs during the ramp up period of the structure.
“With this latest financing, Castlelake continues to innovate by incorporating features that we believe will enhance efficiency and value for our limited partner investors,” said Evan Carruthers, managing partner at Castlelake. “We are grateful for our investors’ ongoing support of the Castlelake Aviation platform and we look forward to continuing our record as a differentiated servicer of aircraft ABS.”
CLAS 2017-1 is comprised of three tranches: $616 million Class A loans with a fixed coupon of 3.967% yielding 4%; $90 million Class B loans with a fixed coupon of 5.926% yielding 6%; and $79.5 million Class C loans with a fixed coupon of 6.899% yielding 7%. The weighted average yield across the structure is 4.5%. The Class A loans have an initial loan-to-adjusted base value (LTV) of 65.5% and have been rated A by Standard & Poor’s (S&P) and Kroll Bond Rating Agency (KBRA). Class B loans have an initial LTV of 75.1% and are rated BBB by S&P and KBRA, and the Class C loans have an initial LTV of 83.5% and are rated BB by S&P and BB- by KBRA. More information is available at https://www.krollbondratings.com/show_report/7124.
With the completion of CLAS 2017-1, funds and investment platforms managed by Castlelake have issued approximately $3 billion in aircraft ABS since beginning the program in 2014. Since inception through March 31, 2017, these funds and investment platforms have invested in more than 440 aircraft and 950 engines across multiple aircraft and engine types. Castlelake offers full aircraft and engine leasing services and specializes in creative, flexible solutions for mid- to end-of-life aircraft and engines. The Castlelake Aviation team is comprised of professionals with extensive experience in sourcing, underwriting and technical management.
Castlelake will act as servicer for the transaction. Deutsche Bank Securities, Inc. and Citigroup Global Markets Inc. acted as joint structuring agents for the transaction. Goldman Sachs and BNP Paribas acted as joint lead arrangers. Natixis S.A. serves as liquidity facility provider.
The loans issued by CLAS 2017-1 in the transaction have not been registered under the United States Securities Act of 1933, as amended.