Case study

Air Lease bond wins Aviation News’ 2022 “Deal of the Year”

09 Mar 2023 . 3 min read

Air Lease Corporation’s dual 5-year and 10-year bond issuance from January last year has been awarded “Overall Deal of the Year” by leading industry publication, Aviation News, based on votes by industry peers. NatWest acted as Active Bookrunner for the 5-year tranche.

Helping to modernise airline fleets

Air Lease Corporation (ALC) is a leading aircraft leasing company principally engaged in purchasing commercial aircraft from Boeing and Airbus and leasing them to its 117 airline customers in 62 countries.

Since its inception in 2010, ALC has focused on purchasing the most modern, fuel-efficient aircraft available. In many cases, the US company serves as a launch customer for Boeing or Airbus, playing a crucial role in introducing a new aircraft type into the global fleet. As of 31 December 2021, ALC’s fleet had a weighted average age of 4.5 years[1], relative to the world’s fleet of commercial passenger aircraft average age of approximately 11 years[2]. Its aircraft is generally 20-25% more fuel-efficient and has a significantly smaller noise footprint than the aircraft the specialist provider replaces[3]. Over the next few years, ALC is scheduled to take delivery of over 400 new aircraft.

Dual 5-year and 10-year bond issuance 2.9 times oversubscribed

The award-winning transaction, a combined $750 million 5-year bond and $750 million 10-year bond issuance in January 2022, attracted peak orders of $4.4bn and $3.9bn respectively ending around $2.8bn and $2bn, which represented a 2.9x oversubscription rate – higher than the average USD bond oversubscription rate of 2.1x in 2022.

This transaction marked NatWest Markets’ second Active Bookrunner mandate for Air Lease and followed eight passive Bookrunner mandates from the company since entering the relationship with the customer in April 2019.

Supporting the sustainable growth of the aviation sector

Daniel Verwholt, SVP & Treasurer, Air Lease Corporation, commented: “We are thrilled to have won this prestigious award for our $1.5 billion transaction of senior unsecured medium-term notes in January last year. The proceeds of this issuance, as with all our issuances, supports the ongoing purchase of new, technologically advanced aircraft, which contributes towards reducing the impact of air travel on the environment and supports the sustainable growth of the aviation sector.”

Rosie Gill, NatWest, said: “We congratulate our customer on this fantastic achievement, and we’re absolutely delighted to have been able to support Air Lease with this transaction. We look forward to working with them in the future on their exciting journey of modernising the airline industry.”

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Article image © Air Lease Corporation

[1] Weighted average based on net book value of ALC’s owned fleet
[2] OliverWyman
[3] Airbus: latest A350XWB/A320neo compared to older aircraft in this size category

Disclaimer

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