CIT Aviation Finance is coming out with a $640-million, single-tranche deal backed by aircraft operating leases, according to a presale report by Fitch Ratings.
The agency expects to assign a Asf’ rating to the deal, which has a legal final maturity of 25 years.
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The deal will repay principal on a monthly basis, with senior expenses and fees first, unpaid interest payments on the class A and class B notes, then amounts to satisfy the coverage tests or to fund a principal reserve, if any.
Classes A, B and C benefit from credit enhancement levels of 26%, 17% and 13%, respectively and have an initial loan-to-value ratio of 74%, 83% and 87%, respectively.
The investment managers new deal launches into a healthy aircraft market.
By aircraft value, Fitch says 6% are leased to credits considered investment grade, while the weighted average rating by Fitch Value ranges between 'B' and 'B-'.
The deal must own at least eight assets, otherwise it will begin to use any excess cash to fully pay down the notes.
