Stonepeak and Bellinger Complete $893.477MM Aircraft Loan Securitization

Stonepeak Partners, an alternative investment firm specializing in infrastructure and real assets, and Bellinger Asset Management, an investment management firm focused on the origination and management of investments in aviation, completed a broadly syndicated aircraft loan securitization: SALT 2021-1 Trust, which issued a total of $893.477 million of notes backed by loans secured by 156 aircraft operated by 45 airline operators located in 29 jurisdictions. The underlying credit counterparties in the portfolio include leasing companies and airlines.

The transaction, which is the aviation sector’s first broadly syndicated aircraft loan securitization, according to Stonepeak and Bellinger, represents the refinancing of the first joint investment made by Stonepeak and Bellinger since the launch of the firms’ diversified, independent aviation investment platform in May 2021. The transaction utilized a traditional aircraft ABS structure and rating methodology but adopted CLO technology to offer investors additional structural features and protections. Five tranches of secured notes were issued, with the three senior-most tranches receiving investment grade ratings.

The offering was more than three times oversubscribed. Funds managed by affiliates of Stonepeak and Bellinger will retain the equity in the SALT 2021-1 transaction, and Bellinger Loan Management, an affiliate of Bellinger, will act as servicer for the loan portfolio.

“We are very pleased to have successfully completed our first asset-backed securitization in the aviation sector,” Luke Taylor, senior managing director and executive committee member at Stonepeak said. “The SALT 2021-1 transaction is an important milestone in the growth of our aviation investment platform with Bellinger.”

“We are excited to bring the first public aircraft loan securitization to market and open up a new channel of financing for the sector,” Kyu Dong-Yu, managing director and head of aviation at Stonepeak, said. “We see this as a transformative transaction for both the development of our aviation private credit strategy and for the broader aviation industry. We look forward to identifying additional opportunities to finance transactions utilizing this innovative structure.”

“We believe that private credit will play an increasingly important role in aviation finance as some traditional aviation finance banks retreat from the sector or focus on their core, strategic relationships,” René Mansveld, managing partner of Bellinger, said. “Access to efficient, long-term and match-funded capital and a broad-base of institutional investors is critical to the success of any aviation private credit strategy. With the SALT 2021-1 transaction, we used a mix of traditional aircraft ABS and CLO technology to create a new offering that was very well supported by institutional investors. We are well placed to replicate that technology for future transactions.”

Goldman Sachs and Deutsche Bank Securities served as co-lead structuring agents and co-lead bookrunners on the transaction and Citi and Mizuho Securities served as bookrunners. Kroll Bond Rating Agency was the sole rating agency on the transaction. Allen & Overy served as legal advisor to the issuer and Milbank served as legal advisor to the co-lead initial purchasers.

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