Asset-backed investments with attractive returns – investing in aircraft finance

Ongoing high demand for capital in the aircraft finance market is increasingly attracting the interest of institutional investors seeking asset-backed investments with attractive returns. Prime Capital can offer the right portfolio and access solutions for this type of investment for institutional investors.

An investment in aircraft loans is, from an economic viewpoint, similar to investing in amortizing bonds that pay an attractive interest rate and are asset-backed. Prime Capital has already made these lucrative investment opportunities in the aircraft finance market investable for a number of institutional investors via bespoke securitization and fund structures.

The benefits of aircraft-backed debt

  • Good growth prospects: Long-term growth in passenger numbers translates into strong demand for aircraft and the corresponding finance
  • Rising demand: Growing demand for aircrafts is predicted as a result of continued urbanization, especially in developing countries; this will generate further growth in the leasing market
  • A highly standardized asset and controlled development of capacities: More than 80 % of all aircrafts in commercial use are delivered by Boeing and Airbus
  • Standardized financing structures within a secure, international legal Framework
  • Wide range of investment strategies: The aircraft finance market offers enough opportunities for a broad return/risk profile; this enables a range of investment strategies to be implemented on the basis of clearly defined investment criteria (defining e.g. credit quality of the transactions and LTV)
  • Risk diversification: Low correlation with other asset classes

Our aircraft finance services

  • Portfolio construction and management as well as risk management in the context of AIFMD
  • Selection process for a suitable Sourcing Bank
  • Development of investment criteria, investment selection and portfolio composition
  • Conducting market conformity checks prior to acquiring the loans
  • Checking all disbursement requirements (including due Diligence, calculation and verification of the purchase price, collateral check)
  • Loan analysis and monitoring
  • Calculation of client-specific stress tests to meet regulatory or internal requirements
  • Portfolio optimization and calculation of key risk parameters based on a multi-period credit risk model.
  • Preparation of client-specific risk and regulatory reports and monitoring of the portfolio’s investment guidelines
  • Own model for analysing credit quality, internal rating and evaluation
  • Liquidity monitoring and planning