Bank loan

ADGM-based lessor Sirius concludes bank loan with Deutsche Bank to refinance aircraft acquisition

Aircraft lessor Sirius Aviation Capital Holdings said one of its joint venture units closed its first bank facility with Deutsche Bank to refinance the acquisition of five narrow-body aircraft it acquired in 2020.

The five planes are leased from three different carriers: three Boeing 737 Next-Generation with Texas-based Southwest, one Airbus A320 with Florida-based Spirit Airlines and another A320 with Etihad Airways from Abu Dhabi, Sirius said Wednesday.

“Establishing this banking relationship is an important step for the company,” said Kieran Ryan, Chief Financial Officer of Sirius. “The successful completion of this debt transaction is both an endorsement of the underlying strength of the mid-life aircraft market and Sirius’ business strategy of leasing these aircraft to leading operators.”

The Covid-19 pandemic is the worst crisis to hit the aviation industry, with airlines, aircraft manufacturers, rental companies and other supply chain companies hit hard after falling demand of air travel last year. Cash-strapped airlines delayed payments to donors, which boosted funding, and delayed deliveries from Boeing and Airbus.

However, the global aviation industry is recovering in spurts as countries continue their Covid-19 vaccination campaigns and relax some travel restrictions. Boeing has raised its 20-year forecast for demand for commercial aircraft, citing signs of recovery from the pandemic, improving global economic growth and a transition of airlines to newer, greener aircraft.

Sirius’ stake in the joint venture was funded through a commitment from its lead investor Abu Dhabi Catalyst Partners, a joint venture between Mubadala Investment Company and US investment firm Falcon Edge.

Sirius began operations in the Abu Dhabi Global Market (ADGM) in March of last year, shortly after the start of the Covid-19 pandemic. The company aims to double its fleet to 25 aircraft over the next 12 months and to more than 100 over the next three years.

“Looking ahead, we have a strong portfolio of attractive investment opportunities that we will realize in the coming months,” said Mr. Ryan.

“We anticipate that air traffic volumes will continue to increase as vaccines are deployed around the world, and we plan to use this recovery to double our fleet … We will also continue to work closely with our investors , our shareholders and the ADGM team to achieve these ambitious goals.

Update: September 15, 2021, 10:55 a.m.

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