Apollo and Athene to Acquire PK AirFinance from GE Capital

Apollo Global Management and Athene Holding will purchase PK AirFinance  from GE Capital’s Aviation Services (GECAS) unit. In connection with this transaction, Apollo will acquire the PK AirFinance aircraft lending platform and Athene will acquire PK AirFinance’s existing portfolio of loans.

Financial details of the transaction were not disclosed, although the $3.6 billion of PK AirFinance financing receivables that were held for sale in the second quarter of 2019 are being sold at a premium to book value in this transaction.

Alec Burger, GE Capital president and CEO, said, “Apollo’s vast lending experience, complementary platforms, and exceptional track record across diversified assets and geographies make it the ideal partner to accelerate PK AirFinance’s growth. This sale is aligned to GE Capital’s overall strategy to become smaller and simpler, and our commitment to reduce our assets by $10 billion in 2019 is now more than halfway complete. We continue to focus on shrinking GE Capital’s balance sheet, achieving a debt-to-equity ratio of less than 4x by 2020, and supporting GE Industrial growth through our remaining GECAS, Energy Financial Services, and Industrial Finance businesses.”

Jim Belardi, CEO of Athene, said, “This transaction provides us with a unique opportunity to acquire a large, diversified portfolio of high-quality loans with attractive risk-adjusted returns. In addition, this deal is another great example of the unique benefits of our strategic relationship with Apollo and its commitment to building direct origination platforms in support of the continued growth of our business.”

James Zelter, co-president of Apollo, said, “We are very excited to be acquiring the PK AirFinance platform which, under GE’s outstanding stewardship, has become one of the world’s leading aircraft lending businesses, and is highly complementary to our existing aircraft leasing capabilities. This transaction also demonstrates our ongoing commitment to meet the investment needs of Athene and our clients, and is consistent with our objective to continue to expand Apollo’s capabilities to directly originate high quality assets.”

PK AirFinance’s team of investment professionals, who primarily focus on originations and syndications as well as underwriting and portfolio management, will transfer to Apollo upon completion of the transaction.

The completion of the acquisition is subject to customary conditions and is expected to close during the fourth quarter of 2019. Citi and Goldman Sachs provided financial advice and Paul, Weiss, Rifkind, Wharton & Garrison and Clifford Chance legal advice to GE Capital. Citi, RBC Capital Markets and Mizuho provided debt financing for the transaction, and RBC Capital Markets served as financial advisor to Apollo.

PK AirFinance is an aircraft lending business that serves airlines, aircraft traders, lessors, investors and financial institutions globally with loans to borrowers in more than 40 countries.

Apollo is a global alternative investment manager with offices in New York, Los Angeles, San Diego, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong, Shanghai and Tokyo.

Athene, through its subsidiaries, is a retirement services company that issues, reinsures and acquires retirement savings products designed for individuals and institutions seeking to fund retirement needs.

GE Capital Aviation Services is an aviation lessor and financier which offers a broad array of financing products and services including operating leases, purchase/leasebacks, secured debt financing, asset sales and servicing.

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