SKY Leasing Closes $663MM Secured Notes Offering



SKY Leasing, an aircraft leasing company, closed an issuance of $663 million of secured notes by SLAM 2021-1 Limited and SLAM 2021-1 LLC (SLAM). SLAM expects to use a portion of the proceeds of the notes to acquire a portfolio of 16 Airbus and Boeing aircraft valued at approximately $885 million. The portfolio features an average aircraft age of 1.6 years and a weighted average lease term of 11.1 years. The portfolio includes 10 A321NEO aircraft. SKY Leasing will act as servicer for SLAM’s aircraft portfolio.

The offering consisted of two series of notes: $592.4 million Series A notes with an interest rate of 2.434% and $70.7 million of Series B notes with an interest rate of 3.422%. The Series A notes have an initial loan-to-value (LTV) of 67%. Moody’s Investor Services rated the Series A notes A1 and Kroll Bond Rating Agency rated them A. The Series B Notes have an initial LTV of 75%. Moody’s Investor Services rated the Series B notes Baa1 and Kroll Bond Rating Agency rated them BBB. Both the Series A notes and Series B notes have an initial expected maturity of seven years and an initial expected weighted average life of 5.5 years based on the pricing case cash flow model. An affiliate of SKY Leasing acquired the E notes of SLAM.

“We are pleased that the SLAM portfolio attracted a diverse, global group of investors to achieve the lowest all-in yield ever for an aircraft ABS,” Matthew Crawford, head of capital markets at SKY Leasing, said. “The success of this transaction validates SKY’s investment approach, which enables our platform to continue to provide efficient capital solutions to our airline customers and delivering high-quality portfolios to our capital partners.”

SKY Leasing expects to refinance its existing warehouse debt financing facility with proceeds from the SLAM transaction.

MUFG and Citi acted as joint lead structuring agents and joint lead bookrunners, Morgan Stanley acted as joint lead bookrunner and Natixis, Societe Generale, BofA Securities and Deutsche Bank acted as joint bookrunners on the transaction. Natixis is the liquidity facility provider for the transaction. Vedder Price acted as legal counsel to SKY Leasing and Clifford Chance acted as legal counsel to the initial purchasers.

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