The offering consisted of a three-tranche structure, catering to investors with varying risk appetites.

The $459.9m Class A tranche, with a A/A rating, signifying a low-default investment. The $73m Class B tranche, with a BBB+/BBB rating, offering a bit more risk for a potentially higher return.

Rounding out the structure is the $42m Class C tranche, which carries the BB/BB rating, translating to the highest risk/reward proposition for yield-hungry investors.

“We are very pleased with the results of our latest successful issuance,” said Vivek Kaushal, CEO, Global Jet Capital. “It underscores the robustness of the BJETS securitisation program and the strong performance of the company’s previous ABS transactions. We continue to broaden our investor base, demonstrating the increasing appeal of the business aviation sector and our company.”

This is Global Jet Capital’s seventh ABS offering, bringing total assets securitised to approximately $5.1bn and bonds issued to approximately $4.2bn. The transaction successfully attracted 38 investors, with seven being fresh faces to the BJETS programme.

Citigroup served as the lead structuring agent and bookrunner, supported by Deutsche Bank Securities, Morgan Stanley, BofA Securities, and KKR Capital Markets acting as joint structuring agents and bookrunners.

Citizens Capital Markets also joined the party as a co-manager. Notably, Global Jet Capital will retain servicing rights on the securitised assets.

Under the hood of BJETS 2024-1 lies the securitisation of cash flows generated from a diversified pool of business jet loans and leases.

This offering encompasses 31 such leases and loans extended to corporations and prominent figures across 18 distinct industries. The underlying assets themselves showcase a variety of 21 different aircraft models, with a focus on mid-cabin to large-cabin business jets.

The post Global Jet Capital raises $575m with BJETS 2024-1 issuance appeared first on Corporate Jet Investor.

* With this, its sixth deal, Global Jet Capital has now issued $3.6bn backed by business jets worth $3.6bn.

Global Jet Capital has closed a $609m securitisation with BJETS 2022-1.

Global Jet Capital is one of the two main issuers of business jet paper along with Stonebriar Commercial Finance which issues bonds backed by a range of asset classes including aircraft.

The bonds were bough by 27 different investors, including eight who bought BJETS bonds for the first time.

BJETS 2022-1 was backed by 25 different aircraft types – mainly mid sized and large aircraft -financed for 37 corporations and individuals.

“We completed yet another successful issuance despite turbulent market conditions. This demonstrates the maturity of the BJETS securitization program and thestrong performance of the company’s previous ABS transactions, which have shown remarkable resilience largely attributable to the strong performance of Global Jet Capital’s highly diversified portfolio and relative strength in the business aviation sector,” said Vivek Kaushal, CEO of Global Jet Capital.

BJETS 2022-1

A Note: $512.8m
Rated: A (S&P)/A-(Kroll)

B Note: $60.3m
Rated: BBB(S&P)/BBB(Kroll)

C Note: $35.8m
Rated: BB (S&P)/BB (Kroll)

Deutsche Bank Securities was the
Lead structuring agent and lead bookrunner: Deutsche Bank
Joint structuring agents and joint bookrunners: Citigroup, Morgan Stanley, BofA Securities, TCG Capital Markets LLC and KKR Co-manager: Citizens Capital Markets
Servicer: Global Jet Capital will continue to service the securitized assets.

Press release:

Danbury, CT – May 17, 2022 – Global Jet Capital, a global leader in financial solutions for business aircraft, announced today the closing of its BJETS 2022-1 securitization, raising approximately $609 million. BJETS 2022-1 is Global Jet Capital’s sixth asset-backed security (ABS) offering, bringing total assets securitized to approximately $4.4 billion and bonds issued to approximately $3.6 billion.

The BJETS 2022-1 offering contained three tranches of notes: a $512.8 million Class A tranche, a $60.3 million Class B tranche, and a $35.8 million Class C tranche. It is notable that S&P Global Ratings and Kroll Bond Rating Agency LLC assigned BJETS 2022-1 ratings of A/A-, BBB/BBB and BB/BB on the Class A, B and C tranches, respectively. The transaction attracted 27 investors, 8 of which were new to BJETS.

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 2022-1 comprises over 37 corporations and global business leaders representing over 23 different industry segments, with the largest segment only making up around 12 percent. Over 25 different aircraft models – primarily mid- to large-cabin business aircraft – are represented in the transaction.

Deutsche Bank Securities was the lead structuring agent and lead bookrunner and Citigroup, Morgan Stanley, BofA Securities, TCG Capital Markets LLC and KKR Capital Markets were joint structuring agents and joint bookrunners for the BJETS 2022-1 transaction. In addition, Citizens Capital Markets was a co-manager. Global Jet Capital will continue to service the securitized assets.

Vivek Kaushal, CEO of Global Jet Capital, stated, “We completed yet another successful issuance despite turbulent market conditions. This demonstrates the maturity of the BJETS securitization program and thestrong performance of the company’s previous ABS transactions, which have shown remarkable resilience largely attributable to the strong performance of Global Jet Capital’s highly diversified portfolio and relative strength in the business aviation sector.”

The post Global Jet Capital closes $606m BJETS 2022-1 securitisation appeared first on Corporate Jet Investor.

 The $2bn synthetic securitisation frees up Risk Weighted Assets (RWA) improving the economic return of the underlying portfolio. This allows Credit Suisse to reinvest risk capacity into more lending. Credit Suisse says that the transaction offers competitive terms to investors while increasing the capital velocity of the bank by a significant amount.

Although business jet securitisations are regularly issued by Stonebriar Commercial Finance and Global Jet Capital, bankers think that this is the first time that yacht or corporate jet debt has been securitised by a private bank.

Credit Suisse’s motivation for the deal is very different to Stonebriar and Global Jet Capital, which raise cash when they issue bonds. Synthetic securitisations – which typically use a mixture of credit default swaps and bonds – allow banks to transfer the risk from loans and leases. They are not about raising new capital or funding.

But, by removing the risk of a default, the bank no longer needs to allocate regulatory capital (typically cash invested in government bonds) against the possibility of loans going bad. By freeing up this regulatory capital, the bank can keep lending to new clients.

Because the transaction is synthetic, Credit Suisse did not sell the loans and leases, just the default risk. Specialist publication Structured Credit Investor, which first reported the transaction, says that there are more than 100 borrowers in the underlying portfolio. As with other securitisations the names of these borrowers were not shared with investors.

If a significant number of clients default, investors lose their right to interest or principal payments. Synthetic securitisations are typically tranched or split into different levels to offer investors different risks and rewards.

Structured Credit Investor says there is a $80m first loss tranche and a $10m second loss tranche. These pay much higher interest than the interest on the underlying portfolio – the first loss tranche offers interest of 11.5% over the Secured Overnight Financing Rate (SOFR) – but are the first to stop paying if there are any losses and therefore carry most of the economic risk. This interest equates to less than 50bps on the underlying portfolio which shows the high quality of the underlying loans. 

The super senior tranche which is on top of the first loss tranche and second loss tranche is retained by Credit Suisse. The junior notes are listed on the International Stock Exchange.

Banks regularly use synthetic securitisations to remove risk from mortgage, credit card and other loans. The first synthetic securitisation on a commercial aircraft portfolio was in 2001.

Credit Suisse is expected to reuse the structure for future synthetic securitisations.

More on business jet securitisation

Stonebriar securitisation shows investors still buying business jets  

The plane’s bond – why securitisation matters

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