Avion Capital: a new financing tool for Airbus

Airbus, CIT Group Inc., Crédit Agricole Indosuez (CAI) and Kreditanstalt für Wiederaufbau (KfW) announce the creation of Avion Capital Limited. This new joint venture company will provide, on a non-exclusive basis, financing, in the form of finance leases or long term loans, at market rates for Airbus customers who have either called on an Airbus backstop financing commitment or who have otherwise sought the assistance of Airbus to source or arrange secured financing at delivery. It is the ultimate goal of Avion to sell down its financings.

Airbus Financial Services, CIT Group Structured Finance (UK) Limited, Indosuez Airfinance S.A. (a wholly owned subsidiary of Crédit Agricole Indosuez S.A.) and Kreditanstalt für Wiederaufbau will underwrite the financing to Avion Capital. By virtue of their specific expertise and resources, they will additionally undertake various agency roles such as syndication, paying agency and security trustee functions, administrative back office and remarketing services.

Each year the joint venture will consider financing specific deliveries in compliance with agreed investment criteria and on terms defined by reference to an underwriting model which specifies the loan to value ratio, pricing and the amount of junior debt to be retained in equal shares by Avion’s participants or their affiliates after syndication of the senior debt in the market.

Avion Capital has been incorporated in Ireland and its operational base is in Dublin. Mr Colin Thaine has been appointed the CEO; he is a former head of aircraft finance at the London office of the English law firm, Denton Wilde Sapte. He brings 30 years of aviation experience to the joint venture. His duties shall include the negotiation of documentation with customers and the management of the portfolio of Avion.

The establishment of this new financing vehicle is wholly consistent with the existing Airbus customer finance strategy of looking to the financial markets to finance the acquisition of its customers’ aircraft and holding financing only when necessary and selling down exposures as soon as the market permits.

Benoit Debains, SVP, Finance of Airbus said "Avion Capital will provide Airbus with a further tool enabling it to meet the financing needs of our customers in these difficult market conditions supplementing the current customer support already offered by our relationship international banks and financial institutions and by our wholly owned subsidiary Airbus Financial Services. We are very pleased to secure the participation in a common project of long term partners and experienced aircraft financing institutions from Europe and the United States."

Nikita Zdanow, Group CEO of CIT's Capital Finance group said "Avion Capital will be handling aircraft which Airbus has previously committed to finance. CIT, with its extensive aerospace experience will be able to assist Avion in the syndication, remarketing and sale of those transactions entered into by Avion Capital. We look forward to working with Airbus, Crédit Agricole Indosuez, and KfW to make this venture a success."

Emmanuel Feld, SVP Global Head of Aerospace and Shipping at Crédit Agricole Indosuez said "With this new joint company, Crédit Agricole Indosuez Group is pleased to continue and strengthen its long-standing relationship with Airbus and to extend its cooperation with KfW and CIT. Avion's customers will be able to benefit from CAI’s leading role in arrangement and syndication of various structured aircraft financings."

Christian Murach, SVP, Kreditanstalt für Wiederaufbau's Head of Transportation said "Avion Capital stands for an innovative product in a challenging market. It signifies an important expansion of KfW's product range in aircraft finance. The Bank considers the cooperation among longstanding partners as well as the combination of their different background of experience in the industry as a key factor of this new financing vehicle."

Airbus is an EADS joint Company with BAE SYSTEMS.

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