KKR Launches Commercial Aviation Lending Platform, Buys $800MM Portfolio from CIT

KKR launched AV AirFinance Limited, a global commercial aviation loan servicer established by a team of industry professionals together with KKR. The new secured loan servicing platform combines long-term capital and decades of experience structuring commercial aircraft loan transactions to offer financing solutions to commercial aviation customers.

To support the launch, KKR and AV AirFinance agreed to purchase a nearly $800 million portfolio of aviation loans from CIT, including more than 50 loans for approximately 60 commercial aircraft. The loans in the portfolio have an average yield in the mid-single digits and an average remaining term of approximately four years.

Siggi Kristinsson, an industry veteran who most recently co-founded and served as CEO of Volito Aviation Services AB, a company providing debt origination and advisory services to Goldman Sachs and other financial institutions, will lead AV AirFinance as CEO. In addition, Ryan Jasinski joined the AV AirFinance team from CIT as part of the related portfolio purchase and will continue to focus on loan origination in the Americas. Per Waldelof, former president of PK AirFinance, will serve as a consultant advising on loan origination and other aspects of AV AirFinance’s operations.

AV AirFinance will support an array of commercial clients, including airlines, cargo operators, lessors, manufacturers and investors, across all aspects of the ownership cycle, including PDP, acquisition, leasing, conversion and tear down. Through its partnership with KKR, AV AirFinance will have global origination capabilities and the ability to arrange longer-term, flexible and competitive financing for a range of single aircraft and large portfolio transactions.

“AV AirFinance is an exciting expansion of our asset-based finance strategy into directly originated commercial aircraft loans, which represent an attractive downside protected investment opportunity for our long-term capital,” Dan Pietrzak, partner and co-head of private credit at KKR, said. “We are delighted to be partnering with Siggi and his experienced team to build a new leading loan servicing platform for the commercial aviation market.”

“We are very excited to be entering the market at this time to participate in the social and economic recovery, which is driving demand for commercial aviation and increasing the importance of the long-term financing solutions that support the industry,” Kristinsson said. “With our strong foundation, experienced team and the support of KKR, AV AirFinance is well positioned to deliver tailored lending options and flexible terms that enable commercial aviation customers to achieve their business goals.”

“The launch of a dedicated aviation lending platform marks a significant milestone for KKR in the aviation sector, building on our experience in areas including commercial aircraft leasing and private aviation,” Patrick Clancy, principal at KKR, said. “We are thrilled to partner with the AV AirFinance team to offer differentiated solutions to the market, and we see significant opportunities for future growth supported by a large market opportunity and the favorable long-term outlook for the commercial aviation industry.”

Separate accounts managed by KKR are funding the portfolio acquisition from CIT. AV AirFinance is KKR’s latest investment in the aviation sector and follows investments in Altitude Aviation, Altavair, KKR DVB Aviation Capital, K2 Aviation, DCAL Aviation, Wheels Up, Global Jet Capital and JetEdge, among others.

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