NOTE: The below originally appeared as the editorial in our September 11 One Minute Week newsletter. To find out more, and sign up for free, please click here.
“If you can afford to buy a business jet surely you can pay for it?”
Anyone who finances business jets will have heard that question many times when meeting new people at dinner parties and other social events. But anyone involved in transactions knows how important finance is to the health of business aviation.
The good news is that there is now far more capital and innovative financing options available than at any time since 2008. This is true in the US and internationally. And there are more new sources of finance coming soon.
Buyers now have far more options available to them and financiers are competing hard for transactions. (The one exception is export credit deals where Ex-Im urgently needs to be re-authorised).
This competition has also increased interest in several portfolios that are for sale
GE Corporate Aircraft Finance’s portfolio is the most obvious one of these. Jeffrey Immelt, CEO of GE announced that GE would sell $200 billion of financial assets in April and since then it has sold a number of business including its commercial truck and trailer business to Bank of Montreal this week.
The GE portfolio, however, is just one of several deals out there – both in the US and Europe. And there are no shortage of potential buyers. But it is also easy to underestimate how much due diligence portfolios require.
Although one advantage of targeting portfolios is that you can just tell people you are involved in M&A and avoid having to explain business jet finance.