PK AirFinance, an aviation lending platform and affiliate of Apollo, has closed its inaugural aircraft loan asset-backed securitization: PK ALIFT LOAN FUNDING 3 Series 2024-1 (PKAIR 2024-1). PKAIR 2024-1 issued over $622 million of notes that will be used to acquire the rights to the economics of a portfolio of aviation loans via the acquisition a 100% series limited partnership interest in a PK-managed origination vehicle.
PK ALIFT 2024-1 marks the first commercial aircraft loan ABS issuance in 2024 and represents the first* AAA-rated aviation ABS public issuance in more than 20 years, which PK attributes to the portfolio asset quality as well as its management team and servicing platform. PKALIFT 2024-1 was rated by both KBRA and DBRS.
The oversubscribed issuance saw broad participation from capital markets participants, including third-party insurers. Notes are secured by the proceeds of a portfolio of 122 senior-secured aviation loans across 70 narrowbody aircraft, 6 widebody aircraft, 30 freighter aircraft, 7 engines and 9 regional jet aircraft spanning 52 unique obligors.
“PK is excited to close this strategically significant transaction which diversifies our financing sources and supports our integrated aviation platform’s demand for directly originated aviation assets,” Gary Rothschild, CEO of PK AirFinance, said. “This transaction — supported by a AAA rating — is a testament to PK’s demonstrated track record within aviation finance, the strength and diversity of our collateral pool and our comprehensive servicing capabilities. We believe the PKAIR shelf will further enhance our ability to provide flexible, competitive financings to our airline and lessor clients over the long term.”
Apollo Global Solutions served as sole lead arranger and Redding Ridge Asset Management acted as a structuring agent on the transaction. BNP Paribas, Mizuho Americas, RBC and Apollo Global Solutions served as joint lead bookrunners. Milbank served as issuer counsel and Vedder Price acted as lender counsel.
*Excluding select insurance-backed issuances that received AAA-ratings by virtue of insuring certain credit risk.
