Avolon has agreed on terms to buy a portfolio of 118 planes from investment manager Castlelake, in a deal worth more than €1 billion.
The Dublin-based aircraft lessor reached a deal to acquire Castlelake Aviation Limited, it said on Friday. The sale is expected to close in the first quarter of 2025.
Avolon will pay about $1.2 billion (€1 billion) for the aircraft portfolio, Avolon’s Chinese parent company, Bohai Leasing, said in a separate filing.
The portfolio’s total assets were valued at $5 billion at the end of March, and “will accelerate Avolon’s earnings growth, building its fleet at attractive yields”, said Avolon. Castlelake has as much as $3.3 billion of transferable debt “available to Avolon on closing, with the balance funded from Avolon’s existing sources of liquidity”, it added.
“This transaction accelerates our growth plans adding a portfolio of assets that will further strengthen our cash flow and earnings profile,” said Avolon chief executive Andy Cronin. “They are complementary to our existing portfolio and will increase our fleet at attractive yields, supporting our positive ratings trajectory.”
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The portfolio includes 105 aircraft already leased out to carriers, along with commitments for 13 others. There are also two engines on lease, as well as nine loans, said Avolon. About two-thirds of the planes are narrow body, while 70 per cent are so-called new-generation aircraft and have a weighted age of 4.7 years with an average of 8.4 years remaining on their leases.
The deal “is a win-win for all parties: returning capital to Castlelake’s and CA Ltd’s investor stakeholders, position lessees for ongoing high-quality asset management services, and provide Avolon with a fleet of high-quality aircraft assets,” said Joe McConnell, Castlelake partner and deputy co-chief investment officer.
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