Floreat Group has embarked on a securitisation programme focused on the aviation sector to provide long-term fixed income investments to its institutional and high net worth clients, the company said.
Deutsche Bank AG London is acting as the primary settlement agent and paying agent.
The company said the first issuance will issue in December 2016 for up to USD175 million of notes (with denominations of USD200,000 each) and is linked to a portfolio of four Airbus A330s on leases to geographically diversified airlines.
The notes will have a 10-year term in line with the maturity of the underlying leases, will pay a fixed coupon of 7.0 percent per annum, will be issued by a Luxembourg securitisation vehicle and will be listed on the Euro MTF market of the Luxembourg stock exchange. Part of the notes will be structured as being Sharia-compliant for Floreat´s Middle Eastern investors.
The first Airbus A330-200 is leased to Virgin Australia and was purchased for the portfolio on 30 November. The remaining aircraft will likely be acquired over the course of December. The total value of the portfolio will be around USD400 million and will be funded with the proceeds of the notes and senior debt provided by Nord LB.
Floreat Group will seed the notes and is responsible for distribution via their placement team within Floreat Merchant Banking Ltd., which is authorized and regulated by the FCA.