Stonebriar Sells Paper Planes

Banks still finance more deals than any type of financial institution – and there is no sign of this changing fast. But new bank regulations – including Basel III – have made business jet finance less attractive for some, like CIT.

“There is a sucking sound in the middle where equipment financiers like GE used to finance,” says one banker. “There is a big opportunity for non-bank lenders.”

One of the challenges for new-entrants is finding debt to leverage deals. Last month, Stonebriar Commercial Finance – a new entrant backed by an insurance company- quietly showed one way.

Stonebriar closed its first securitization with a $254 million deal selling loans and leases. Business aviation was actually the largest asset class, with some 10 domestic business jet deals worth $60 million making up 23% of the assets in the securitization (there were also nine air medical helicopters). Although this is not the first time that corporate jets have been sold into the bond market, this is highest proportion since the Global Financial Crisis. Credit Suisse and Guggenheim Securities were joint book runners.

Stonebriar is aiming to become a regular issuer which will help other investors understand business aviation as an asset class.