MIAMI – Global Jet Capital, a global leader in financial solutions for business aircraft, announced today the closing of its BJETS 2020-1 securitization, raising approximately US$522m.

BJETS 2020-1 is Global Jet Capital’s fourth ABS offering, bringing total assets securitized to over US$2.8bn and bonds issued to over US$2.3bn.

In basic terms, securitization requires good pools of loans, according to the underwriting requirements specified, and it also often needs credit enhancements through insurance or other forms of backing.

Bombardier Global 7500 inflight. Photo: Bombardier

Financial Situation

The BJETS 2020-1 offering contained three tranches of notes: a US$426.4m Class A tranche, a US$63.6m Class B tranche, and a US$31.8m Class C tranche. Each tranche was oversubscribed and attracted orders from over 30 investors.

Global Jet Capital’s latest offering, BJETS 2020-1, builds off the strong performance of the company’s previous ABS transactions, which have demonstrated remarkable resilience throughout the COVID-19 pandemic, in stark contrast to a wide variety of other ABS asset classes, including commercial aviation.

This resilience is attributable to the strong performance of Global Jet Capital’s highly diversified portfolio and relative strength in the business aviation sector despite challenges related to the COVID-19 pandemic.

Gulfstream G500, which rolled out mid-October, 2014. (Credits: Gulfstream Aerospace)

Over 30 Aircraft Models

As with previous BJETS transactions, this deal consists of a collection of business aircraft loans and leases representing a diverse group of obligors and assets.

BJETS 2020-1 comprises over 50 corporations and global business leaders representing over 30
different industry segments, from medical services to consumer durables. Over 30 different aircraft models, primarily mid- to large-cabin business aircraft, are represented in the transaction.

Bombardier Global 5500 inflight. Photo: Bombardier

International Bank Credits

In conjunction with closing the BJETS 2020-1 securitization, Global Jet Capital also extended the term of its committed warehouse credit facility provided by a group of leading international banking institutions, including Deutsche Bank as a structuring agent and lender and Bank of America, Citibank, Morgan Stanley.

Earlier in October, Global Jet Capital entered into its first privately placed financing transaction, raising US$77m in new funding for the business.

The single-tranche investment-grade rated debt was placed with a single institutional investor. EA Markets served as exclusive financial advisor and placement agent for Global Jet Capital.

Cessna Citation Sovereign Photo: Cessna

Statement from Global Jet Capital

Shawn Vick, CEO of Global Jet Capital, said, “We are pleased that we continue to broaden our investor base with each new offering, having added several new investors to BJETS 2020-1 who were attracted to the business aviation sector and our company.”

“We also appreciate the support of our existing, and new, lenders and the confidence that their continued commitment to the credit facility reflects in our business. We will continue to use the ABS market as an integral part of our funding strategy.”

Cessna Citation Longitude Photo: Cessna

An Important Value Proposition

Vick also said, “Our ongoing success in the ABS market and the growing strength of our liquidity profile are representative of our underwriting discipline and the resulting stability of our portfolio, not to mention the vitality of the business aviation sector as a whole.”

“The value proposition supporting business aviation, random access, productivity, and security, has never been more important to corporations and business leaders around the globe.”

“The evidence of this can be seen in business aircraft operations and transaction metrics which snapped back to near 2019 levels following an initial drop off at the outset of the COVID-19 pandemic.”

Featured image: Bombardier Global 7500 inflight. Photo: Bombardier