IRISH AIRCRAFT leasing group Avolon has secured a $465 million long-term debt facility from three US banks as part of its latest round of fundraising, The Irish Timeshas learned.
The facilities have been secured with Wells Fargo, Citi and Morgan Stanley. It is understood that negotiations with these banks began last October.
This move broadens Avolon’s debt funding base. It currently has facilities with a number of banks in Europe.
The transaction was led and structured by Wells Fargo, and will be used to increase the size of Avolon’s aircraft portfolio.
This latest funding round comes just five days after Avolon raised $650 million in debt and equity as part of a second stage of capital raising by the cash-hungry business.
Since May 2010, Avolon, which was founded by Clare businessman Dómhnal Slattery, has secured $2.05 billion in debt and equity funds.
Avolon’s chief executive John Higgins yesterday said the company would probably seek to raise an additional $650 million in debt funding this year. “We’re continuing to look at aggressively building the business in 2011/2012. Our debt raising will continue.”
Avolon currently has 64 aircraft on its books, and Mr Higgins said its target was to build this to between 120 and 130.
He said the latest funding was likely to be drawn down in the first half of this year. “We have some aircraft identified.”
He declined to disclose the interest terms of the facility, but the duration is about seven years.
Jessica Gray, head of commercial operating asset finance of Wells Fargo Securities, said Avolon had “compelling growth prospects”, and said the bank’s funding commitment reflected its “confidence in the Avolon team, the strength and reputation of their investor group and the quality of Avolon’s growing aircraft portfolio”.
Avolon, which is based in Dublin and employs about 20 staff, last week announced it had raised $650 million in debt and equity funding. This comprised $250 million in equity from a number of investors, including Cinven, CVC Capital Partners and Oak Hill Capital Partners.
The balance comprised debt raised from three specialist aviation banks: DVB, Nord LB and KfW IPEX-Bank.