With elevated oil prices amid an ongoing war in the Middle East, it’s counterintuitive that aircraft ABS would have a truly banner year.
But the numbers are in. Primary issuance had already smashed annual total records in July, and has since continued on a pace to set the sector up for a truly bombastic output by year end.
A confluence of factors is making the financing tool more important than ever for aircraft financiers and lessors — a user base which has expanded appreciably. Meanwhile, investors see that aircraft ABS has now endured several crises that were expected to crater bondholder returns and did not, as well as a relative-value arbitrage.
The result is that $11.2bn of new-issue aircraft ABS had printed year to date as of 31 July, according to Deutsche Bank data. That’s higher than in any period since the bank began tracking the sector in 2013, easily beating the previous record annual total of $9.6bn set in 2018. The 16 issuers that have tapped the market this year also surpass the 15 that raised debt through the ABS market in all of 2018, according to the bank’s research.
Evan Wallach, CEO of advisory firm Global AirFinance Services
