Apollo Aviation prices Apollo Aviation securitization equity trust 2016-2

Apollo Aviation Group (“Apollo Aviation”) priced its third aircraft securitization on Friday, October 28, 2016: Apollo Aviation Securitization Equity Trust 2016-2 (AASET 2016-2). AASET 2016-2 will borrow US$640m of asset backed secured term loans that will be used to acquire a fleet of 35 aircraft.
“With our third ABS and second in 2016, Apollo continues to build upon its position as one of the premier aviation focused asset managers,” said William Hoffman, Chairman of Apollo Aviation. “Apollo Aviation continues to deliver value through the strength of its access to the capital markets combined with its specialized knowledge of the mid-life commercial aviation sector.”
AASET 2016-2 will borrow three tranches of asset backed secured term loans with the following principal amounts and effective initial yield: US$515m of Class A loans at 4.25%, $85 million of Class B loans at 6.00%, and US$40m of Class C loans at 8.00%. The Class A loans will have an initial loan-to-adjusted base value (LTV) of 65.0% and are expected to be rated A(sf) by Standard & Poor’s Ratings Services (“S&P”) and Kroll Bond Rating Agency, Inc. (“KBRA”). Class B loans will have an initial LTV of 75.7% and are expected to be rated BBB(sf) by S&P and KBRA, and the Class C loans will have an initial LTV of 80.8% and are expected to be rated BB(sf) by S&P and KBRA. Apollo Aviation Management Limited, an affiliate of Apollo Aviation, will act as servicer for the transaction. This is the third ABS transaction of funds managed by affiliates of Apollo Aviation since 2014. Upon completion of AASET 2016-2, such ABS transactions will have issued or borrowed in aggregate more than US$1.7bn in asset backed secured debt.