Air Lease, Napier Park Establish Second Aircraft Leasing Joint Venture
AUG 4, 2017 - 7:20 am
A wholly-owned subsidiary of Air Lease entered into a joint venture with a co-investment vehicle arranged by Napier Park Global Capital for the purpose of investing in commercial aircraft and leasing them to airlines worldwide.
The newly formed entity is named Blackbird Capital II and 90.5% of the equity is owned, through the JV partner, by a pooled investment vehicle of long-term institutional investors managed by Napier Park. Air Lease owns 9.5% of the joint venture and will not consolidate the entity.
Blackbird Capital II closed its first round of equity commitments, aggregating $231 million. The fund has the ability to add additional commitments over the next 18 months based on investment opportunities.
Aircraft will be acquired with equity, a planned $650 million warehouse credit facility and other forms of debt financing.
In contrast to the Blackbird Capital I LLC joint venture, the investment window for Blackbird Capital II has been extended from two to four years, allowing for additional flexibility to purchase incremental aircraft alongside Air Lease’s forward fleet planning work with airlines. Air Lease will provide management services over a 12-year period to the joint venture for a servicing fee based upon aircraft assets under management.
In addition, the Air Lease expects to sell two aircraft from its portfolio to the joint venture to initially seed the fund. Through the joint venture, Air Lease will manage additional aircraft lease transactions to better serve its airline customers and may grow the size of fund as opportunities develop.
“We are excited to continue and grow our partnership with Napier Park and its group of institutional investors following the success of our first fund. They share ALC’s vision of creating long-term value for both our airline customers and investors through leased aircraft assets,” said Ryan McKenna, vice president and head of strategic planning for Air Lease. “The Blackbird Capital platform is an important partnership for ALC’s strategy to continue growing our management business and serves as an additional, flexible source of capital to help our team deliver exceptional results in the global aircraft leasing business.”
The revolving warehouse facility was led by BNP Paribas, as joint lead arranger and agent, and Bank of America as joint lead arranger, and includes Societe Generale, Fifth Third Bank, The Bank of Tokyo-Mitsubishi UFJ, LTD, Citibank and Goldman Sachs Bank USA.
Hughes Hubbard & Reed advised Blackbird Capital II, Munger Tolles & Olson advised the Air Lease and Sidley Austin advised Napier Park in connection with the formation of the joint venture. Milbank, Tweed, Hadley & McCloy advised the joint lead arrangers and the lenders in connection with the warehouse facility. Hughes Hubbard & Reed advised Blackbird Capital II in connection with the warehouse facility.
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