Aviation: Structuring in a Time of Recovery

As the world takes notable and promising steps forward out of the pandemic, Walkers is pleased to see strong positive trends in aviation transactional activity in recent months. The industry has already seen a resurgence of activity this year in the capital markets with several aviation asset backed note issuances, involving, among others, Castlelake, Air Lease Corporation, Falko and Sky Leasing. Together with the ongoing new investments in joint venture platforms, there is a growing sense of optimism for the future.

A common feature of the structuring of these types of transactions is the use of Cayman incorporated, Irish tax resident special purpose vehicles. For the purposes of this note we will refer to such a vehicle as KY-IRE SPV. In the context of an asset backed note issuance, the KY-IRE SPV will typically act as issuer of the senior notes to the capital markets investors and, where relevant, equity notes to the equity investors. For a joint venture or warehouse financing structure, the KY-IRE SPV may act as the holding or parent company to the aircraft owning entities (“AOEs”). In each case the KY-IRE SPV will typically sit above Irish incorporated, Irish tax resident AOEs.

In this note, we set out some of the many advantages of using a KY-IRE SPV and how Walkers can be of assistance.

 

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CAYMAN ISLANDS
Sarah HumplebySenior CounselT +1 345 814 6843sarah.humpleby@walkersglobal.com

IRELAND
Killian McSharryPartnerT +353 1 470 6696killian.mcsharry@walkersglobal.com