GE Capital Aviation Services and PIMCO Agree to Form Aircraft Leasing Platform
Posted on 10/19/2020
GE Capital Aviation Services (GECAS) is the lessor and business unit of General Electric (GE). GECAS and Pacific Investment Management Company, LLC (PIMCO) reached a preliminary agreement to develop an aviation leasing platform to support up to US$ 3 billion in aircraft asset financings. The transaction is subject to customary closing conditions and receipt of required regulatory approvals.
The global airline industry is in disarray from the COVID-19 pandemic and lockdowns. The PIMCO-GECAS platform sees an opportunity to inject liquidity into the industry as traditional financing options for airlines recedes.
This strategic investment platform will enable GECAS and PIMCO-advised accounts to acquire new and young fuel-efficient aircraft to meet the needs of a diverse set of global airlines over many years. The portfolio will initially focus on narrowbody aircraft while allowing flexibility to invest in attractive opportunities in the widebody market.
GECAS will source transactions for the platform, act as servicer, and provide asset management services for the platform.
Aircraft lessors have been impacted by the COVID-19 pandemic, creating losses. In September 2020, Avolon Holdings Limited, an international aircraft leasing company, priced US$ 650 million of 5.50% senior unsecured notes due 2026. Avolon is 70% owned by an indirect subsidiary of Bohai Leasing Co., Ltd., a public company listed on the Shenzhen Stock Exchange and 30% owned by ORIX Aviation Systems, a subsidiary of ORIX Corporation.