Vx Capital Partners (Vx) closed its inaugural asset-backed deal becoming the first issuer since 1999 to securitise an all-freighter portfolio.
The company said the loan-format issuance generated $189 million across three classes of term loans, secured by 35 737 Classic freighters. Most of the aircraft were originally acquired in passenger configuration by Vx and subsequently converted and leased.
Vx Cargo 2018-1 Trust will be serviced by Vx through an affiliate, and the equity in the transaction will be retained by Vx Freighter Investment Fund (VXF). The $107 million of equity behind VXF was raised in 2016.
The three classes of loans it said were rated A, BBB and BB by Kroll Bond Rating Agency (KBRA) and proceeds will be used to acquire 35 aircraft with a maintenance adjusted base value of $249 million.
Bob Brown, one of the founding partners of Vx, said the growth of e-commerce along with the need to replace older model aircraft combine to generate “steady demand” for narrowbody freighters. It will now turn the focus in VXF to re-leasing and asset management.
At close, the portfolio had a weighted average aircraft age of 23.1 years and weighted average remaining lease term of approximately 4.3 years. The aircraft are leased to 12 lessees in 12 countries, with three aircraft in the process of conversion. All but one aircraft are subject to lease.