Thomas Flohr’s new aircraft leasing company IALT borrows $206m

A VistaJet Bombardier Challenger 605 (Photo: Alud Davies)

International Aircraft Leasing and Trading (IALT), a new leasing company founded by VistaJet’s Thomas Flohr, has closed a $206 million pre-delivery payment for 10 Bombardier Challenger 605 with Aviation Finance Company.

International Aircraft Leasing and Trading (IALT), a new business jet aircraft leasing company founded by Thomas Flohr, has closed a $206 million pre-delivery payment with Aviation Finance Company. The cash will be used to make pre-delivery payments for 10 new Bombardier Challenger 605s that will be leased to VistaJet, the business jet operator that is also owned by Flohr.

ALSO READ: Bombardier Sells 10 Challengers To An Undisclosed Customer

IALT ordered 38 Bombardier business aircraft, 28 Global business jets and 10 Challenger 605 business jets worth $2.2 billion, on December 31.

Aviation Finance Company is the lead investor in the PDP transaction but also has also syndicated some to a mixture of banks, sovereign wealth funds and capital market investors. It will arrange a similar long-term facility when the Challenger 605s are delivered. Minsheng Financial Leasing will lease one Global 5000 and four Global 6000s from the order to VistaJet. These aircraft will be financed by Export Development Canada in a similar deal to one VistaJet closed with China’s ICBC Leasing in 2012.

Flohr founded VistaJet in 2004 after a successful career in computer leasing.  Although IALT’s first aircraft are being leased to VistaJet, Flohr is believed to be considering using it to finance aircraft for other buyers.

ALSO READ: Export Development Canada finances Minsheng Financial Leasing

Pre-delivery payments (which are  also known as construction payments) are paid when manufacturers actually start building the aircraft that the buyer has ordered.

Aviation Finance Company, which was launched in 2012, is a boutique financial institution focused on aviation. The firm – along with a New York sister company Aviation Finance Corp – specialises in arranging deals that allow capital market investors to finance aircraft, aviation companies and infrastructure.

In 2013 it structured an innovative tranched pre-delivery payment facility for Synergy Aerospace – the majority owner of Columbia’s Avianca Airlines. The $263 million loan, which financed eight Airbus A330 aircraft, was split into a senior tranche provided by a bank and a junior portion which was privately placed.  It also recently announced that it had used another private placement to finance five Boeing 737-800s for an international airline.

Aviation Finance is working on several other possible helicopter and business jet facilities.

Corporate Jet Investor: This is the first time that IALT, Thomas Flohr’s new leasing company, has been made public. Although he is most associated with VistaJet it is worth remembering that Flohr is at heart an asset financier. We do not yet know much about his ambitions for IALT but this could become an exciting new business jet financier rather than just a captive leasing company for VistaJet. As its name suggests the company will also be involved in aircraft trading.

This is also an exciting finance deal it its own right. Many people have talked about encouraging capital markets investors into aviation, but apart from a few airline bonds (EETCs) very few people have actually closed deals. AFC deserves real credit for this transaction.