Stonebriar $572m issue shows bond investors still buying business jets
Stonebriar Commercial Finance has shown that capital market investors still have an appetite for business jet loans.
The finance company has successfully sold a $572m asset-backed securitisation backed by a rage of assets. It included deals from all four of Stonebriars’ business groups: general equipment, aviation capital, rail leasing, and real estate. It also included some Canadian assets.
The five largest types of equipment by value were: railcars (25.9%); manufacturing equipment (17.7%); corporate aircraft (17.3%); oil and gas equipment (9.4%); and information technology (6.1%).
“This transaction is significant because it shows that investors are differentiating between commercial aviation and business aviation assets,” said Nicholas Sandler, Executive Vice President, Stonebriar in a call with Corporate Jet Investor. “Covid-19 has highlighted to investors the key differences between the two asset classes.”
The eight business aircraft loans were valued at $103.8m.
The senior SCFET 20122020-1 A-1 note was rated P-1 by Moody’s and K1+ by Kroll – the highest possible rating from both agencies. Moody’s and Kroll also each gave the A-2 and A-3 tranches triple-A ratings.
“The transaction was met with over $2 billion of demand from 28 third-party investors across 50 separate orders,” said Dave Fate, President and CEO, Stonebriar. “We remain fortunate to have such a strong, committed bank group and are pleased to achieve such efficient execution in the current market environment.”
This is Stonebriar’s seventh securitisation since the financier launched in 2015 raising more than $3.5 billion. One has already paid out.
“Stonebriar’s continued strong performance, enhanced transparency during the marketing process, and multiple ratings upgrades on our six previous ABS pools continue to attract an investor base with a mix of repeat and new investors across the capital structure,” said Fate. “We’re proud to count an estimated 50 institutional investors in our ABS investor base, including some of the largest global asset managers, pension funds and insurance companies.”
BofA Securities was Lead Structuring Agent and Joint Bookrunner. Credit Suisse Securities was Co-Structuring Agent and Joint Bookrunner. Citizens Capital Markets and Fifth Third Securities were Co-Managers on the financing. US Bank is backup servicer and custodian.
Fate added: “The Bank of America team, led by Carl Anderson, remains a trusted financial advisor and did a great job structuring and marketing the deal for us.”
Since 2008 Stonebriar and Global Jet Capital have been the only two issuers of securitizations backed by business jets.
Nicholas Sandler, Executive Vice President, Stonebriar on investing in business aviation