GECAS and Oz Management (NYSE: OZM) (“Oz”) announced today the closing of STARR 2019-1. In this transaction GECAS is selling twenty in-production Boeing and Airbus narrowbodies to START II Ltd. With an average aircraft age of less than six years, the diversified portfolio includes aircraft currently on lease to 13 airlines in 11 countries and has total appraised value of approximately $589mn.
START II Ltd. is financing its acquisition through its issuance of 144A/Reg. S debt and equity. The sales are subject to typical conditions precedent including any regulatory approvals that may be necessary. In similar fashion to the STARR 2018-1 transaction -- which was the first aircraft portfolio purchase vehicle structure to include 144A tradeable equity and a dedicated Asset Manager for equity investors – an affiliate of Oz will serve as an Asset Manager and GECAS will continue to service the portfolio.
GECAS is a world-leading lessor with significant experience servicing aircraft. Having developed a successful model for servicing third-party aircraft, GECAS’ 25-year track record includes servicing more than 550 aircraft across 14 multi-owner platforms with initial portfolio values totaling greater than $14B.
An affiliate of Oz, through an exclusive, multi-year agreement with GECAS, will serve as an asset manager on this and potential future transactions, acting on behalf of the syndicated equity investors as an advisor to START II Ltd.’s board regarding portfolio matters. In this capacity, Oz will provide increased transparency on behalf of START II Ltd. through enhanced investor reporting to improve liquidity for debt and equity investors.
With nearly $1 trillion in outstanding market value in commercial aviation, this asset manager structure aims to broaden the investor base in the sector and bring increased institutional capital to the space, similar to other securitization markets such as CLOs. In addition, funds managed by Oz have invested equity in START II Ltd.
Source: General Electric
Date: Apr 18, 2019
