Phoenix Aviation Capital ("Phoenix"), a full-service aircraft lessor, priced its first structured Enhanced Equipment Trust Certificate (EETC) financing, Phoenix Aviation Capital Series 2024-1 EETC (PAC 2024-1), which is the first such transaction to be completed by Phoenix since its formation in April 2024.
"We are pleased with the strong investor interest in this transaction, which we believe speaks to our servicing capabilities and deep expertise in the aircraft leasing sector," said Jared Ailstock, Managing Partner at AIP. "Investors will benefit from the attractive collateral of in-demand, liquid, narrowbody aircraft in addition to structural enhancements designed to provide further downside protection. We greatly appreciate the support of our partners to successfully complete this transaction."
PAC 2024-1 totals $242 million of asset-backed debt and will be used to finance a portfolio of seven new Boeing 737 MAX 8 aircraft across two lessees. The aircraft in the portfolio have a weighted average age of approximately 1.0 years and a remaining lease term of approximately 10.0 years.
The transaction comprises two tranches: $205.2 million Class A notes and $39.9 million of Class B notes. The Class A notes to be issued have an initial loan-to-adjusted base value (LTV) of 57.9% and the Class B notes to be issued have an initial LTV of 68.3%.
DBRS has indicated the Class A notes will be rated A+ and the Class B notes will be rated BBB.
In addition to the attractive Boeing 737 MAX 8 collateral, PAC 2024-1 features robust structural features designed to provide investors with additional protections. These enhancements include allocating maintenance income to be used towards required maintenance expense top-ups based on a 24-month look-forward schedule, an excess reserve account where available maintenance income funds will be used towards required excess reserve top-ups based on a predefined targeted balance schedule, an expense account, which can be used towards paying any senior expenses.
AIP will act as servicer for the transaction. Citigroup Global Markets Inc. is the sole structuring agent and joint lead placement agent and Citibank, N.A. is the trustee, security trustee and operating bank. RBC acted as joint lead placement agent. Gibson, Dunn & Crutcher LLP and McCann Fitzgerald provided legal counsel to AIP and Phoenix.