Helicopter financing with friends
There is an old golf joke where one player asks the caddy: “Is my friend in the rough or is the lucky bastard on the green?” The same has always been true in banking where arch rivals on one loan happily join together to syndicate another deal.
It is also true with the new operating leasing companies like Milestone, Waypoint and Lease Corporation. Whilst they may compete to finance operators the leasing companies are also new, strong credits for banks to lend to. This week, CIT announced that it has financed three AW139s for Lease Corporation International.
In an excellent presentation at our London Helicopter Finance Conference in February, John Sheldon, non-executive director of Lease Corporation International (and long-time director of Sheldon and Partners) estimated that in the next five years some $15 billion of work-horse helicopters would need financing.
John estimated that export credit agencies would supply $2 billion with operating lessors (both the new ones and existing ones like GE and CIT) providing $3 billion with bond markets/private equity putting in a similar amount. He also expects operators to fund about $3 billion in equity.
As John said, that leaves about $4 billion in debt coming directly from banks to operators directly and this does not include financing leasing companies. Enough opportunities for everyone to stay friends.