Zephyrus Aviation Capital Announces Closing of ZCAP 2018-1

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$336.6 Million Secured Notes to Finance the Acquisition of a Large Portfolio of Aircraft

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Oct 10, 2018, 13:36 ET

DUBLIN, Oct. 10, 2018 /PRNewswire/ -- Zephyrus Aviation Capital ("Zephyrus" or the "Company"), a fleet management solutions provider focused on older and end-of-life aircraft and engine leasing & trading, announced that it has closed the Company's first structured ABS financing, ZCAP 2018-1. Zephyrus Capital Aviation Partners 2018-1 Ltd and Zephyrus Capital Aviation Partners 2018-1 LLC (together, the "Borrowers") will borrow $336.6 million, which will be used to finance the acquisition of a diversified portfolio of 21 in-production, predominantly narrow-body aircraft on lease to 19 lessees in 14 countries, from Dublin-based Avolon.

ZCAP 2018-1 is comprised of a single Class A tranche of loans in the initial principal amount of $336.6 million (the "Loans") with a fixed coupon of 4.605% yielding 5.153%. The Loans have an initial loan-to-value ratio (calculated as the note amount divided by the lower of the mean and median of appraisers' base values and current market values) of 74% and have been rated A / A by S&P Global Ratings and Kroll Bond Rating Agency, respectively.

This financing event marks the 'groundbreaking' combination of a newly-launched company acquiring a substantial portfolio directly into an ABS structure. "We are pleased to see such strong demand for our initial 'out-of-the-box' ABS. With a book that was more than two times over-subscribed, by knowledgeable and quality investors, our transaction structure – of a single-tranche loan format with significant equity fully-retained by Zephyrus – was well-received by the market and signifies approval of Zephyrus' long-term approach," said Zephyrus CEO Damon J. D'Agostino.

"This initial portfolio is a high-quality mid-life portfolio which, along with our experience as a management team, was well-suited for the ABS market. We look forward to continuing to grow our business through the capital markets and other diversified financing solutions," said Tony Diaz, Non-Executive Chairman for Zephyrus.

Dómhnal Slattery, CEO of Avolon, commented: "In this business, relationships matter, and we look forward to a long-term collaborative relationship with Zephyrus, based on the relative ease of this 21-aircraft transaction with the Zephyrus team. Avolon is pleased to have been part of this particular transaction and to have Zephyrus as a partner with respect to future asset dispositions."

Deutsche Bank acted as Sole Structuring Agent, and Canyon CTS served as the Managing Agent, for the ABS transaction. Vedder Price advised Zephyrus and the Borrowers, Clifford Chance advised Deutsche Bank, A&L Goodbody acted as Irish counsel, and Maples and Calder acted as Cayman Islands counsel.

Zephyrus is backed by funds managed by Virgo Investment Group, which has been investing in aviation since 2010. Seabury Capital Group served as the sole investment banking advisor to Zephyrus for the 21-aircraft acquisition and is a minority equity stakeholder in the Company as part of its merchant banking strategy.

About Zephyrus Aviation Capital
Zephyrus Aviation Capital is an aircraft and engine leasing & trading company led by a team of industry veterans and focused on aircraft which are in the mid to mature stage of their lifecycle. Utilizing unparalleled industry relationships, leveraging a proven industry track record of transactional success, and employing innovative strategies, Zephyrus is a fleet management solutions provider with a customer-centric approach that creates value for all stakeholders. Zephyrus' in-depth knowledge of aviation assets, coupled with industry leading partnerships, allows for innovative solutions across the aviation industry. For more information, please visit www.zacap.aero.

SOURCE Zephyrus Aviation Capital