Munich-based aviation finance arranger EMP structured assets GmbH (EMP), working in conjunction with senior and junior lenders in Germany and Dubai has arranged the purchase of an A380-800 operating lease to Emirates from Stellwagen Finance Company Limited, the holding company for Aviation Finance Company Limited (AFC). AFC initially arranged 100% of the financing for Stellwagen. Seraph Aviation Management facilitated the lease novation and sale. The Aircraft was delivered new from Airbus in December 2015.
EMP arranged the structured financing for the Irish SPV lessor that purchased the aircraft. The hybrid operating lease transaction consists of a traditional senior loan provided by Deka. Dubai Islamic Bank (DIB) provided a pari passu senior tranche as well as a 40 % Islamic mezzanine tranche that uses a Murabaha commodities facility to maintain compliance with Islamic law. The relatively small slice of equity was issued through profit participation notes from EMP’s Irish lessor. Deka is the security trustee for DIB. Lease management services to the EMP investors are being provided by Seraph Aviation Management.
Phillip Prior, EMP Partner said: “We are pleased to have completed this deal with AFC/Stellwagen Group and Emirates. Although complicated, the intricate structure of traditional German and Islamic capital makes this transaction one of the more unique. The sterling credit of Emirates allowed us to minimize the residual value risks associated with the A380. We look forward to working again with such efficient and professional counterparties to complete more transactions with AFC in 2016 and beyond.”
“EMP got it right. We are proud to work with institutions like EMP that provide well thought-through, risk-adjusted structures,” said Douglas Brennan, Chief Executive Officer of Aviation Finance Company in Dublin. “These investments last over a decade and with such long time horizons, it is imperative that investors have advisors such as EMP that take the long view and protect their equity through structures that minimize risk, and maximize return. More investors need to look at this relationship when putting money to work in aircraft assets.”
Munich-based EMP arranges and manages aviation finance transactions for Institutional Investors. Focusing on prime carriers and long term leases, EMP refinances its fixed income style transactions through Private Placements mainly to German institutional investors by providing tailor-made investment solutions, which range from bond or note issuances via EMP´s Luxembourg platform to loan syndications via EMP´s German bank partners.
Aviation Finance Company Limited provides alternative sources of capital and arranges financing solutions through innovative financial engineering to meet the needs of the global transportation industry. AFC, headquartered in Dublin, Ireland, along with its sister company, AFC LLC in New York is a wholly-owned subsidiary of Stellwagen Finance Company Limited.
The AFC group works collaboratively with investors, airlines and aircraft manufacturers to deliver outstanding finance solutions and service, a reliable investment partner and financial advisor to airlines and aviation operators seeking debt and equity financing. See also www.avfinco.com
Seraph Aviation Management (SAM), based in Dublin Ireland, is an independent global aircraft manager with over 22 years’ experience. SAM currently manages 29 aircraft and provides aircraft ownership strategies that strive to maximize risk-adjusted returns for our clients. SAM does not own aircraft but serves the financial investment and leasing community by providing independent lease management services. The ownership of SAM is shared by Stellwagen Finance Company, parent of AFC, and the SAM management team. See also www.seraph.aero
Philipp Prior, Managing Partner, EMP Structured Assets GmbH, firstname.lastname@example.org
Karen Payes, Investor Relations, Aviation Finance Company Limited, email@example.com
Patrick Kenny, Investor Relations, Seraph Aviation Management Limited, firstname.lastname@example.org