Investing in Midlife aircraft – What you need to know and ...
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Private and Confidential Investing in Midlife aircraft – What you need to know and how it led to a successful ABS – SPRITE – Why investors need to use this ABS as a benchmark March 2018
Transcript of Investing in Midlife aircraft – What you need to know and ...
Private and Confidential
Investing in Midlife aircraft – What you need to know and how it led to a successful ABS – SPRITE – Why investors need to use this ABS as a benchmark
March 2018
2
Securities Disclaimer: This confidential investor presentation (this “Presentation”) is for informational purposes only and highlights certain selected information about Sprite 2017-1 Limited and Sprite 2017-1 US LLC (together with their subsidiaries, “Sprite” or the “Issuers”). This Presentation is not intended to be read separate from, or in lieu of, the offering memorandum with respect to the offering of the securities (the “offering memorandum”) as supplemented by any term sheet or pricing supplement. This presentation is qualified in its entirety by reference to the offering memorandum with respect to the offering of the securities. You should rely only on the information contained in the offering memorandum as supplemented by any term sheet or pricing supplement in making an investment decision and not this investor presentation.
THE SECURITIES DESCRIBED IN THIS PRESENTATION HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER SECURITIES LAWS OF ANY JURISDICTION. ACCORDINGLY, THE SECURITIES DESCRIBED IN THIS PRESENTATION MAY ONLY BE OFFERED OR SOLD (1) IN THE UNITED STATES TO “QUALIFIED INSTITUTIONAL BUYERS” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (OTHER THAN DISTRIBUTORS) UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE (“RULE 144A”)) (“QIBS”) IN RELIANCE ON THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144A AND (2) TO NON-U.S. PERSONS IN OFFSHORE TRANSACTIONS IN RELIANCE ON REGULATION S UNDER THE SECURITIES ACT (“REGULATION S”). IF ANY SECURITIES ARE OFFERED AND SOLD, THEY WILL BE OFFERED AND SOLD BY THE ISSUERS OF SUCH SECURITIES. WITHOUT LIMITING THE FOREGOING, NONE OF WORLD STAR AVIATION (UK) LIMITED, SPRITE AVIATION HOLDINGS DESIGNATED ACTIVITY COMPANY, CANYON FINANCIAL SERVICES LIMITED OR THEIR RESPECTIVE AFFILIATES (THE “TRANSACTION PARTIES”) WILL PROVIDE CREDIT SUPPORT FOR OR OTHERWISE BE OBLIGATED IN ANY WAY WITH RESPECT TO ANY SECURITIES OFFERED OR SOLD BY THE ISSUER OR CO-ISSUERS OR WITH RESPECT TO ANY OTHER DEBT OR OTHER LIABILITIES OF THE ISSUER OR CO-ISSUERS.
This Presentation does not constitute an offer or an invitation by, or on behalf of, Sprite, the Transaction Parties or any of Mizuho Securities USA LLC , Morgan Stanley & Co. LLC, or any of their respective affiliates (each an “Initial Purchaser” and together with Sprite and the Transaction Parties, the “Relevant Parties”) to subscribe for or purchase any of the securities in any jurisdiction by any person or entity to whom it is unlawful to make such an offer or solicitation in such jurisdiction.
Confidentiality: This Presentation is proprietary and is given for general informational purposes only, shall be kept strictly confidential and may not be reproduced or redistributed, in whole or in part, directly or indirectly to any other person or entity. The distribution, disclosure and/or review of this Presentation and the information herein is subject to your agreement to keep it strictly confidential. If you do not so agree, do not turn the page or review the information in this Presentation and return it immediately to the Relevant Parties. By accepting this Presentation, (1) you agree that you are (a) a QIB or (b) not a U.S. Person and are located outside of the U.S. for purposes of Regulation S and (2) you understand that, the securities described herein have not been and will not be registered under the Securities Act or any other securities laws of any jurisdiction and may not be offered, sold or otherwise transferred unless an exemption from registration under the Securities Act and other applicable securities laws is available.
No Commitment: You understand and agree that none of the Initial Purchasers has made any commitment to provide you or any of your affiliates or any other party on your behalf any financing, products or services with respect to any matters contemplated by this Presentation.
No Representations: No representation or warranty or other assurance of any kind, express or implied, is made as to the accuracy, completeness or suitability of any information in this Presentation or any related written or oral information made available, and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. By accepting this Presentation, the recipient agrees that none of the Initial Purchasers nor any of their respective directors, partners, officers, employees, advisors, shareholders, agents, representatives and controlling persons (collectively, “Representatives”) has any liability relating to or arising from the information in this Presentation or for any errors therein or omission therefrom or the reliance thereon by the recipient or any other person or the provision of this Presentation. The information in this Presentation will be deemed to be automatically superseded and replaced by information provided in the future (whether pursuant to any independent investigation or otherwise) and information contained in the offering memorandum and supplemental offering materials, if any.
Forward-looking Statements: This Presentation may contain certain forward-looking statements, projections, prior results, modeling, valuations or back-testing, which are included for illustration purposes only and are not indicative of any future results. Any such statements, projections, prior results, modeling, valuations or back-testing reflect various estimates and assumptions. Many of these forward-looking statements are based on significant assumptions that are described in the offering memorandum and must be read together with those assumptions. Whether or not any such forward-looking statements or projections are in fact achieved will depend upon future events some of which are not within the control of the Relevant Parties. Actual results may vary from projected results and such variations may be material. No representation is made as to the reasonableness of the assumptions made within or the accuracy or completeness of any forward-looking statements, projections, modeling, valuation or back-testing, or as to any past or future performance or other results. None of the Relevant Parties undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
No Reliance on Initial Purchasers/Independent Assessment and Decisions: You understand and agree that no investment bank is acting as your agent, fiduciary or advisor with respect to any matters contemplated by this Presentation. You should obtain your own independent advice on the financial, legal, accounting, and tax aspects of the subject matter of this Presentation. You agree that you are not relying and will not rely on any communication (written or oral) of an investment bank as investment advice or as a recommendation to enter into any transaction, and that you are capable of assessing the merits of and understanding the proposed transaction (on your own behalf or through independent professional advice), and should you enter into a definitive agreement with an investment bank or any other party referred to in this Presentation or contemplated by the transactions described in this Presentation, you will do so because you have conducted such investigations and performed such diligence as you deemed appropriate and you understand and accept the terms and conditions and risks (including, but not limited to, economic, competitive, operational, financial, credit, legal, accounting and tax risks) of such transaction. The Initial Purchasers do not in any way warrant, represent, or guarantee the financial, accounting, legal or tax results of the transaction described in this Presentation nor does any investment bank hold itself out as a financial, legal, tax or accounting advisor to any party.
Aircraft Valuations: All values, percentages and averages relating to the appraised value of aircraft included in this Presentation (unless otherwise indicated) are based on the average of half-life base values of the aircraft as of June 30, 2017 provided by Aircraft Information Services, Inc., BK Associates, Inc. and morten, beyer & agnew inc. adjusted to reflect projected maintenance status as of November 2017 as determined by Alton Aviation Consultancy LLC. Such appraisals and maintenance forecast are included in the offering memorandum.
Important Information and Qualifications
Table of Contents
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Section I World Star Overview 4
Section II World Star Portfolio Management 14
Section III SPRTE 2017-1 24
4
Section II: World Star Overview
World Star at a Glance
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Leading full-service aircraft management company with particular expertise in mid-to late-life model, high quality, used commercial aircraft
Established in 2003 and dual headquartered in San Francisco and London, with additional presence in Ireland, Israel, Singapore and Colombia (the company is fully owned by its principals)
In-house acquisition, placement, structuring and management capabilities with relationships around the world via an extensive network of contacts in all areas of acquisition, leasing, maintenance, conversion and disposal / sale
Experienced management team with over four industry cycles of investing and operating experience in the commercial aircraft sector:
Demonstrated track record with proven deal flow
Established industry position
Significant connectivity within the market
Over 80% of WSA’s managed fleet is Boeing 737 and Airbus A320 family aircraft
World Star Overview Managed Fleet by Type(1)
Managed Fleet by Region(1)
A319 18%
A320 15%
A321 5%A330-200 5%
A330-300 6%
B737-300 20%
B737-300SF 2%B737-400 6%
B737-800 18%
B777-300 5%
Europe 48% Latin America 12%
Middle East 3%
North America 12%
Africa 4%Asia-Pacific
21%
World Star Currently Service67 Aircraft and Engines to
33 Lessees in 26 Countries Globally
Notes:1) Calculated by number of aircraft as of October 15, 2017 and includes the SPRITE 2017-1 portfolio
World Star in 3 Points
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World Star applies institutional rigour and discipline in a boutique
environment
WSA is a nimble, forward thinking company that retains the discipline, structure and processes of a major company
All areas of aircraft investment management are covered in-house: investment structuring, asset and investment management, aircraft technical and accounts and finance
4 principals run an efficient business to minimize unnecessary costs
World Star’s DNA is heavily metal focused
We don’t fall in love with the “aircraft” – instead, we buy “metal” that produces cash flows
We like to roll up our sleeves and get our hands dirty
While World Star is heavily involved with
mid-life aircraft, World Star also has extensive
monetization experience
Sale of aircraft on “as is, where is” basis
Acquisition of later life aircraft on end-of-life stub leases
Part-out of new, mid-life and older aircraft and engines
Refreshing/rebuilding run-out assets to return them to flying condition
Conversion of passenger aircraft into freighters
World Star Team Composition
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John Flynn, Chairman Emeritus
Sean O’Connor28 years of aviation experience
Marc Iarchy24 years of financing experience
Garreth Slevin22 years of aviation experience
Yoyo Allalouf18 years of leasing experience
Executive Team
Anatolij Andruskevic
Stanislavas Parvickis Paulo Bettencourt
Viktor Janusevskij Tommy Guttmann Joo Kim
Locatio
ns
AmericasUSA - San FranciscoColumbia - Bogota
EuropeUK – LondonIreland – DublinIsrael – Tel AvivLithuania - Vilnius
AsiaSingapore/Hong Kong
Fred Plummer Riva Amar Alice Cordova Pauline SeetoRicardo Barrera Medina
David Rodriguez Brian Rainey Aya Monteverde Yulia ZhangJuan Carlos Alvarez Velez
Rob Tuck Christopher Butt Alice WongRaj Singh Katherine Wang
World Star’s 26 person-team underscores the commitment and rigor required for a successful mid-life aircraft leasing platform
Technical Aircraft Marketing Investment Management
Lease Servicing and Contracts
Accounting and Administration
World Star Global Customer Base
Aircraft bought, sold and leased in over 70 Countries Proven track record in acquiring, remarketing and disposing of aircraft worldwide
With global coverage, aircraft that require relocation are actively marketed in many countries through existing relationships
World Star’s portfolio is proactively managed to avoid continental, country and jurisdictional concentrations
World Star country experience
Legend
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Madagascar Micronesia NetherlandsMexicoMacedonia Malta
Philippines PolandPeruNew Zealand PakistanNorway
Saudi Arabia SerbiaRussiaPortugal RomaniaRep of Congo
Latvia LithuaniaKyrgyzstanJapan KenyaKazakhstan
Hungary IcelandHong KongGeorgia GreeceGermany
Estonia FranceEgyptCzech Rep. EcuadorDenmark
Italy Ivory CoastIsraelIndia IrelandIndonesia
Brazil Canada Colombia CroatiaBahamas BulgariaBhutanBermudaBelgium ChinaBoliviaAlbania AustriaAustraliaArgentina
Turkey UK United States VenezuelaSpain UkraineTajikistanTaiwanSweden UAETanzaniaSlovakia South KoreaSouth AfricaSlovenia
World Star Believes Its Aircraft Mgmt. Platform Mitigates Conflicts of Interest
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World Star’s business focuses on managing joint venture vehicles for third party equity investors with each investment vehicle targeting different strategic initiatives based on pre-defined parameters
World Star’s Aircraft Management Platform
Joint Venture 1(Investor 1)
Joint Venture 2Owned by Oaktree
Joint Venture 3(Investor 3)
Strategic initiative in part-out late-life
aircraft
Strategic initiative in mid-life aircraft
(SPRITE Holdings)
Strategic initiative in stub leases with low
residual values
World Star believes the nature of its business across various joint venture vehicles with different investment objectives coupled with the boutique culture of the firm mitigates risk of bias for
aircraft during sales / re leasing
Illustrative example
Mandate Mandate Mandate
Illustrative example
World Star Strategy – Experts in the Mid-to Late-Life Aircraft Market
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New Aircraft on Lease to Tier 1 Carrier Mid Life Assets on Lease to Tier 1/2Carrier Mature Assets/Part-outs
Aircraft Age 0-3 years 4-15 years 15-25 years
Lease Tenure 10-14 years 5-10 years 3-5 years
Credit Tier 1 International Airlines Tier 1 / 2 credits Credit quality can vary
Debt
Widely Available
LTVs of 60-80%
Fully amortising during lease period
Transactions can have debt in place
Harder to originate new debt
Potential balloon
Most transactions are unlevered
Assets
Focus on liquidity
Widebodies: A330, B777-300ER
Narrowbodies: B737-800, A320
Focus on liquidity
Single aircraft or multiple asset portfolios
Focus on liquidity
Previous generation models
Realising Value
Potential to sell during lease
Lease extension with lessee
Re-lease to new lessee
Sell asset on lease return
Lease extension with lessee
Re-lease to new lessee
Convert to freighter.
Part out
Sell asset on lease return
Re-lease
Convert to freighter
Part out
Overview
Long term lease
Strong quality credits
Stable cash yields
Possible exits mid way through lease
Shorter term stub lease remaining
Multiple possibilities to realise investor value
Less competitive niche in market
Asset management key
Shorter term transaction
Higher return, more likely to be back ended
Example Targeted Market
Returns (IRR)7 - 10% 10 - 15% 15 - 25%
World Star has focused on mid-life to mature end-of-life aircraft, as historically, this is where their hands-on approach has extracted the most value for their managed equity vehicles
Silo 1 Silo 2 Silo 3
Summary of the Contracted World Star Fleet(1)
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Fleet Distribution
Fleet Distribution by Age (% Total Fleet)(1)
Fleet Characteristics (% Total Fleet)(1)
Notes:1) Calculated by number of aircraft as of October 15, 2017 and includes the SPRITE 2017-1 portfolio
Summary of Contracted World Star Fleet(1)
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Fleet Distribution by Lessee Top 5 Lessees (by number of Aircraft)
Fleet Lease Maturity Ladder(% Total Fleet)
Current Lessee Assets
1 Air Canada 3
2 Air China 3
3 Air Cote d'lvoire 1
4 Air France 1
5 Air Serbia 3
6 Avion Express 1
7 Bhutan Airlines 1
8 Boliviana 4
9 Brussels Airlines 4
10 Canadian North 5
11 China Airlines 1
12 Croatia Airlines 2
13 Emirates 1
14 EVA Airways 1
15 Germania 4
16 GetJet Airlines 2
17 Go2Sky 1
18 Gol 3
19 Grand Cru Airlines 3
20 Hainan Airlines 1
21 IndiGo 2
n/a Part‐Out (2) 3
22 Onur Air 1
23 Safair 1
24 Saudia 1
25 Shenzhen 1
26 Small Planet 1
27 Sriwijaya Air 2
28 Suparna Airlines 1
29 Tame EP 1
30 TAP Portugal 4
31 Trans Air Congo 1
32 Wizz 1
33 Xiamen 1
Grand Total 663%
22%14%
17%11%
13%8%
5%2%
3%3%
20172018201920202021202220232024202520272028
% Total Fleet
Year of lease expira
tion
3% No release ‐ Scrap/Sale6% No release ‐ Scrap/Sale
Average Remaining Lease Term: 3.41
Notes:1) Calculated by number of aircraft as of October 15, 2017 and includes the SPRITE 2017-1 portfolio2) Part-Out = 2 X CFM56-5B and 1 CFM56-7BE engines
There is an additional A320-200 subject to an LOI (dated 11/7/2017) with a Spanish lessee for a lease term of 72 months
Geographic Diversity of Fleet(1)
Fleet Distribution by Region (% Total Assets)
Fleet Distribution by CountryCountry Number of Assets
1 Belgium 4
2 Bhutan 1
3 Bolivia 4
4 Brazil 3
5 Canada 8
6 China 7
7 Congo (Brazzaville) 1
8 Cote d'lvoire 1
9 Croatia 2
10 Ecuador 1
11 France 1
12 Germany 4
13 Hungary 1
14 India 2
15 Indonesia 2
16 Ireland 3
17 Lithuania 7
18 Poland 1
19 Portugal 4
20 Saudi Arabia 1
21 Serbia 3
22 Slovakia 1
23 South Africa 1
25 Taiwan 2
26 Turkey 1
28 UAE 1
Grand Total 67
Notes:1) Calculated by number of aircraft as of October 15, 2017 and includes the SPRITE 2017-1 portfolio 13
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Section III: World Star Portfolio Management
World Star’s Approach to Investment & Management
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4- Exit Multiple exit alternatives
• As “flyers”• Part-out• Refit• Conversion to freighters
2- Due Diligence & Investing Analyse asset, lease and credit information Obtain debt proposals Analyse the process risk and
qualitative factors Determine target investment size and
risk profile Physical due diligence, contracts
and closing
1- Investment Sourcing Leverage our network of:
• Banks• Lessors / other investors• Airlines Focus on selected aircraft families, and
market opportunities Ensure focus on best quality assets
3- Management Manage portfolio market risk, volatility
and concentration Monitor lease compliance and documentation,
including maintenance work Collection, disbursements, insurance,
accounting and reporting Lease / aircraft transition from operator
to operator Technical audit / review
Disciplined credit and valuation methodology,
backed by strong risk controls
Investment Sourcing - World Star Acquisition Sourcing
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Soft Discussions
Submit Bids
Could Win
Rejected
Opportunities
WSA leverages its network of banks, lessors / otherinvestors, and airlines
Indicative transactions
Portions of fleets of existing leasing companies
Often required to maintain 4-5 year averagefleet age; required to sell assets regularly
Aircraft owned by financial investors and / or banks
Aircraft owned and operated by carriers / sale andleaseback
Arbitrage when taking over a contract for a newaircraft from an airline that is in need of financing
Rationalization of distressed Aircraft-on-Ground(“AOG”) or weak / defaulting credit situations in poorcash flow / revenue contract
Wide-body and narrow-body aircraft that are suitablefor cargo conversion
On average, WSA reviews over 60 aircraft per month
Large portfolios under auction
Tailor-made portfolios outside of structured saleprocess
Single / handful of aircraft
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6
4
2
1
Top Reasons for Decline
Current condition
Lease terms
Lessee credit
Unrealistic price expectations
Capabilities Selected Counterparties
Disciplined Approach Through the “Funnel”
World Star’s relationships offer deep, global connections yielding consistent deal flow in addition to unique servicing capabilities unavailable to some competitors
Investment Sourcing - World Star Mgmt. Team Aviation Financing Experience
Raised over $2.4bn of debt from structured financings, warehouses, private placements, commercial banks and seller financings(1)
Placed $720MM of interest rate hedging swaps
Structured, placed and monitored its own complex lessor contingent liability policy with Lloyds syndicates for over 20 years
Financial services competencies including the following:
Bank Revolving Credit Facility
International IPOs and Institutional Private Placements
Commercial Paper Conduit / warehouse facilities
Structured aircraft portfolio financings
Project Finance / Conversion Credit Facilities
Cross-Border Mergers & Acquisitions
Management Team Financing Expertise, Since 1995(1)
Relationships with a Diversified Network of Lenders
Notes:1) Not inclusive of the Sprite 2017-1 Limited transaction, but inclusive of management’s expertise / experience prior to World Star 17
Due Diligence & Investing - World Star’s New Transaction Evaluation Criteria
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Airline Quantitative and Qualitative Analysis
Financial analysis to determine health of balance sheet and any current/future cash flow difficulties
Combined with diligence on the airline to evaluate their strategy, fleet evolution, payment history (if current or not), strength of management etc.
Market soundings through engagement with peer lessors and lenders
Asset Evaluation Lease Evaluation
Return condition analysis to ensure satisfactory value at lease end
Current and future residual value projections
Exit opportunities at lease end – extension, place elsewhere, part-out
Qualitative assessment on marketability of the aircraft
Maintenance events and all projected cash flows
Aircraft utilization analysis to match projected maintenance events and costs
Oversight of aircraft insurances, ensuring compliance with local and international regulation
Jurisdictional Risk Analysis towards to recoverability of the aircraft in an enforced scenario, a “mortgage friendly” jurisdiction
Discussions with sovereign rating agencies and chambers of commerce
Local and Macro Economic Considerations Health of the economies in which the airline operates, on local, regional and continental basis
For any new opportunity, World Star evaluates the transaction from 4 angles to generate a well-rounded decision:
Management - Lease Management
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Reporting Example
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4
Rent Billing
Monthly Utilization Reports
Maintenance Reserves Invoicing
Annual Maintenance Reserves Escalation
Annual Additional Rent / Hour‐Cycle Adjustment
Eurocontrol Statements
Insurance & Reinsurance Expiry Dates
Insurance & Reinsurance Notice Dates
Airline Financial Statements (Within 180 days after the end of the financial year)
Technical InformationLLP Sheets & EGT Margins
Monthly report package to Lessor
Quarterly report package to Lessor
Annual Operating & Aircraft Asset Expense
Budget
Review Quarterly Tech Budgets
Periodic Meeting with Airline
Invoices to Lessee
Reports from Lessee
Notices to Lessee
Other statements
Insurance & Reinsurance
Reports to Lessor Meetings
Legend
Lease contracts are managed through diarized entries per aircraft/transaction to ensure all reporting obligations of the lessee as well as World Star are met - All aircraft events (maintenance, insurance, operational updates etc) are logged within the database, so a full timeline of the aircraft’s status is always available.
Technical capabilities encompass the overseeing of maintenance, as well as management
WSA’s specialist expertise conducive to its mid-life to mature niche focus
Potential for technical overhauls, e.g. engine replacement, major airframe overhaul, shop visit avoidance
Experience of management team a source of competitive advantage over less experienced teams
Understanding of FAA/EASA regulations and requirements to move aircraft to new jurisdiction
Experience in major overhauls of aircraft and engines and developing the work scopes
Experience with maintenance, repair and operations (“MROs”) to agree costs for work scopes
Understand European EASA and United States FAA approvals to manage aircraft airworthiness
Range of aircraft management / inspection experience from regional aircraft to widebody aircraft
Monthly monitoring of aircraft technical status
Pre-purchase inspections for sale/leasebacks
Mid-lease inspections
Management of storage and storage maintenance
Implementation / management of pre-delivery maintenance
Capability to manage aircraft airworthiness and maintenance (including control of aircraft records) for weaker lessee credits
Manage portfolio market risk, volatility and concentration
Monitor lease compliance and documentation, including maintenance work
Collection, disbursements, insurance, accounting, reporting
Lease / aircraft transition from operator to operator
Technical audit / review
Service and Maintenance Management
Capabilities
Technical Capabilities Suite
World Star’s full-service capabilities extend to all major technical aircraft management, maintenance and logistics functions
Management - Technical Management
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Management - Aviation Credit / Risk Management
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Airline Credit Risk Asset Risk
Portfolio Risk
• Using World Star’s proprietary model,maintenance adjusted aircraft residual valuesare projected
• Values from independent appraisers areanalyzed, with a “compare and contrast”approach
• Qualitative market analysis is conducted inhouse, with subscriptions to specialistaviation analytics companies
• All of World Star’s aircraft are analyzed on a by-transaction and by-portfolio basis, with concentration by asset,jurisdiction, lessee monitored
• The airline and asset risk reviews are amalgamated in the database, along with supplementary information andcommentary to provide a full picture of the status of each aircraft up to full portfolio level
• Regular dialogue and face-to-face meetingswith the airline
• Annual credit review - Audited yearlyfinancial accounts are required per the leaseagreements
• Company is compared with appropriatepeers to benchmark performance
• World Star has a weekly meeting to discusseach and every asset
World Star Aviation’s focus towards risk management is to identify, at the earliest possible stage, any potential negative developments with regards to airline credit, aircraft value or portfolio performance
Management - Aviation Credit / Risk Management
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“Alarm” Signals That an Airline May be in Difficulty
Desktop sources:• Trade/business press
• Financial performance decline
• Peers outperforming airline
• Airline fleet utilization reduction
• Political, economic and regulatory changes
Other sources:• Route changes/cancellations
• Aircraft maintenance delays
• Key staff leaving the company
• Suppliers and staff not being paid
• Return of leased aircraft and slowed newdeliveries
The key is close communication with the airline and to assist them wherever possible.It is mutually beneficial that aircraft are returned early instead of having to be repossessed.
World Star is a proactive company that seeks to manage potential situations before they arise
Exit - Investment Strategy
Strategies
World Star has experience in all transaction exit paths, with particular experience in freighter conversions:
Not only single-aisle and narrowbody, but also widebody aircraft
Customers include leading airlines, cargo companies and overnight parcel carriers
World Star manages the conversion process and placement of the aircraft onto a new lease
World Star has extensive experience in providing optimal transaction exit solution for investors
The full coverage includes:
Lease extension with current operator
Reposition aircraft with a new operator
Aircraft sale
Conversion to freighter
Engine and airframe rebuild/restoration
Part-out
World Star’s strategy to increase optionality enables investors to mitigate effects of possible cyclicality (macro orotherwise) and select the cashflow profile most appropriate at the time.
Freighter conversion experience
World Star has extensive experience in providing the optimum transaction exit solution for investors - Multiple exit alternatives may maximize investor return through flexibility and opportunity
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Section IV: SPRTE 2017-1
Region BreakdownThe portfolio is spread over 3 regions, 41% of the portfolio represented by flag carriers
Aircraft Model21 aircraft fleet
(66% narrowbody / 34% widebody)
SPRITE 2017-1: Portfolio Characteristics(1)(2)
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Year of ManufactureThe weighted average age of the
fleet is 8.9 years
Manufacture Year
Country Breakdown15 lessees with no lessee concentration
higher than 14%
Remaining Lease TermThe weighted average remaining lease term
of the fleet is 3.8 years
Lease Expiration Year
Lessee BreakdownThe lessees are spread over 12 countries
1) Unless otherwise noted, all percentages, values, averages, statistic and characteristics of the aircraft and portfolio in this presentation (i) use an October 15, 2017 reference date and (ii) are based on the average of half-life base values of the aircraft determined as of June 30, 2017 by mba, AISI and BK, as adjusted for November 2017 projected maintenance status determined by Alton
2) The GetJet A320-200 listed above is no longer subject to an LOI with GetJet and is instead subject to an LOI (dated 11/7/2017) with a Spanish lessee for a lease term of 72 months
Taiwan 20.8%
China 20.3%
France 13.6%
Brazil 12.1%
Indonesia 7.7%
India 7.2%
Saudi Arabia 3.9%
Lithuania 3.8%Hungary 3.2%
Germany 3.2% Belgium 2.9% Portugal 1.3%
EVA Airways Corporation
14.0%
Société Air France 13.6%
Air China Limited 12.9%
GOL Linhas Aéreas S.A.
12.1%
PT Sriwijaya Air 7.7%
InterGlobe Aviation Limited 7.2%
China Airlines Limited 6.8%
Xiamen Airlines 3.9%
Saudi Arabian Airlines Corporation
3.9%
UAB Get Jet Airlines 3.8%
Shenzhen Airlines Company Limited
3.6%
Wizz Air Hungary Limited 3.2%
Germania Fluggesellschaft
mbh 3.2%
Brussels Airlines SA/NV 2.9% Transportes Aéreos
Portugueses, S.A. 1.3%
Europe, Africa & Middle East (D)
31.9%
South/Central America
12.1%
Asia/Pacific (E)56.0%
737-80040.1%
777-300ER27.7%
A319-1007.4%
A320-20018.1%
A330-3006.8%
23.5%
3.2%
24.8%
4.2% 3.9%
25.7%
10.9%3.7%
0.0%
10.0%
20.0%
30.0%
1.3%6.8%
15.6%
28.9%23.5% 23.9%
0.0%10.0%20.0%30.0%40.0%
SPRITE 2017-1: Portfolio Summary(1)
Aircraft Type AgeYears Lessee Flag
Carrier (2) Lessee Country Remaining Lease Term
InitialAppraised
Value(1)
($MM)
A319-100 8.4 Brussels Yes Belgium 3.4 20.4
A319-100 8.3 Germania No Germany 6.4 22.0
A319-100 18.6 TAP Yes Portugal 4.0 8.7
A320-200 9.6 Wizz No Hungary 1.4 22.5
A320-200 7.5 Saudia Yes Saudi Arabia 0.5 26.8
A320-200 7.3 IndiGo No India 2.7 22.5
A320-200 7.2 IndiGo No India 2.8 27.6
A320-200 9.9 GetJet No Lithuania 6.0 26.4
A330-300 11.2 China Airlines Yes Taiwan 1.2 47.1
B737-800 10 Gol No Brazil 6.0 26.9
B737-800 9.9 Gol No Brazil 6.1 30.6
B737-800 9.1 Gol No Brazil 6.9 26.4
B737-800 10.3 Shenzhen No China 3.2 24.6
B737-800 9.3 Sriwijaya Air No Indonesia 7.0 27.5
B737-800 9.2 XiamenAir No China 4.8 26.8
B737-800 7.3 Air China Yes China 0.6 29.0
B737-800 7.2 Air China Yes China 0.8 29.9
B737-800 7 Air China Yes China 1.0 30.4
B737-800 8.1 Sriwijaya Air No Indonesia 8.0 25.8
B777-300ER 9.2 EVA Airways No Taiwan 2.8 97.4
B777-300ER 8.5 Air France Yes France 5.6 94.68.9* 3.8* 694.0**
26
15 Lessees41% are Flag
Carriers(3)
12 Countries in 3 Regions
Top Lessee Concentration Eva Airways
14%
Top 3 Lessees:EVA AirwaysAir FranceAir China
41%
1) Unless otherwise noted, all percentages, values, averages, statistic and characteristics of the aircraft and portfolio in this presentation (i) use an October 15, 2017 reference date and (ii) are based on the average of half-life base values of the aircraft determined as of June 30, 2017 by mba, AISI and BK, as adjusted for November 2017 projected maintenance status determined by Alton. In addition, the portfolio description herein reflects (i) an assumed lease of MSN 3293 (which was off lease as of October 15, 2017) based on the terms of a letter of intent with the identified lessee in place as of October 15, 2017 and (ii) the assumed delivery to the lessee in December 2017 under the lease of MSN 36816, which was, as of October 15, 2017 expected to be re-delivered in November 2017 under a lease not described herein
2) Defined as fully or partially government or state-owned
*Figures are weighted averages by initial asset value**Figures are a sum of the above
Management Case / Assumptions
27
Asset Initial Lease AOG Period Follow-on Lease / Sale Assumptions Retirement Period
MSN DOM Aircraft Engine Lessee Start End Start End Sale/Retirement Date
979 Mar-99 A319-100 CFM56-5B5/P TAP 99-Mar 21-Sep N/A N/A N/A 21-Oct 1 mths No FOL Assumed
4273 May-10 A320-200 CFM56-5B4/3 Saudia 10-May 18-May 3 mths 18-Aug 24-Aug 24-Sep 1 mths 6Yr FOL Multiple LOIs in negotiation with European operators / Asia operators
36802 Jul-10 B737-800 CFM56-7B26/3 Air China 10-Jul 18-Jul 3 mths 18-Oct 24-Oct 24-Nov 1 mths 6yr FOL Assumed
36547 Jun-10 B737-800 CFM56-7B26/3 Air China 10-Jun 18-Jun(3) 3 mths 18-Nov 24-Nov 24-Dec 1 mths 6yr FOL Assumed
37886 Oct-10 B737-800 CFM56-7B26/3 Air China 10-Oct 18-Oct EXTENSION 18-Oct 24-Oct 24-Nov 1 mths Extension from 10/17/2018 for 72mths to 10/17/2024 assumed
769 Jul-06 A330-300 CF6-80E1A4 China Airlines 08-Dec 18-Dec EXTENSION 18-Dec 24-Dec 25-Jan 1 mths Extension from 12/18/2018 for 72mths to 12/18/2024 assumed
3430 Mar-08 A320-200 V2527-A5 Wizz 08-Mar 19-Mar 3 mths 19-Jun 25-Jun 25-Jul 1 mths 6yr FOL Assumed
4328 Jun-10 A320-200 V2527-A5 IndiGo 10-Jun 20-Jun 3 mths 20-Sep 26-Sep 26-Oct 1 mths 6yr FOL Assumed
33755 Jul-08 B777-300ER GE90-115BL EVA Airways 08-Jul 20-Jul 3 mths 20-Oct 26-Oct 26-Nov 1 mths 6yr FOL Assumed
4384 Aug-10 A320-200 V2527-A5 IndiGo 10-Aug 20-Aug 3 mths 20-Nov 26-Nov 26-Dec 1 mths 6yr FOL Assumed
35215 Jun-07 B737-800 CFM56-7B26/3 Shenzhen 07-Jun 20-Dec 3 mths 21-Mar 27-Mar 27-Apr 1 mths 6yr FOL Assumed
3895 May-09 A319-100 CFM56-5B6/3 Brussels 15-Mar 21-Mar EXTENSION 21-Mar 27-Mar 27-Apr 1 mths Extension from 03/31/2021 for 72 mths to 03/31/2027 assumed
35631 Aug-08 B737-800 CFM56-7B26/3 XiamenAir 08-Aug 22-Aug 3 mths 22-Nov 28-Nov 28-Dec 1 mths 6yr FOL Assumed
35543 Apr-09 B777-300ER GE90-115B Air France 09-May 23-May N/A N/A N/A 23-Jun 1 mths No FOL Assumed
34270 Oct-07 B737-800 CFM56-7B27/3B1 Gol 07-Oct 23-Oct 3 mths 24-Jan 30-Jan 30-Feb 1 mths 6yr FOL Assumed
3293 Nov-07 A320-200 CFM56-5B4/3 GetJet(1) 17-Nov 23-Nov 3 mths 24-Feb 30-Feb 30-Mar 1 mths 6yr FOL Assumed
34272 Nov-07 B737-800 CFM56-7B27/3B1 Gol 07-Nov 23-Nov 3 mths 24-Feb 30-Feb 30-Mar 1 mths 6yr FOL Assumed
3950 Jun-09 A319-100 CFM56-5B6/3 Germania 17-Sep 24-Feb N/A N/A N/A 24-Mar 1 mths No FOL Assumed
35066 Aug-08 B737-800 CFM56-7B27/3B1 Gol 08-Aug 24-Aug 3 mths 24-Nov 30-Nov 30-Dec 1 mths 6yr FOL Assumed
35226 Jun-08 B737-800 CFM56-7B26/3 Sriwijaya Air 16-Oct 24-Oct 3 mths 25-Jan 31-Jan 31-Feb 1 mths 6yr FOL Assumed
36816 Sep-09 B737-800 CFM56-7B26/3 Sriwijaya Air(2) 17-Dec 25-Dec N/A NA NA 26-Jan 1 mths No FOL Assumed
MSN A/C Lessee Lease Expiration Age at 1st Re Lease 2H 2017 1H 2018 2H 2018 1H 2019 2H 2019 1H 2020 2H 2020 1H 2021 2H 2021 1H 2022 2H 2022 1H 2023 2H 2023 1H 2024 2H 2024 1H 2025
979 A319-100 TAP 21-Sep 23 SOLD
4273 A320-200 Saudia 18-May 8 FOL SOLD
36802 B737-800 Air China 18-Jul 8 FOL SOLD
36547 B737-800 Air China 18-Jun(3) 8 Extension FOL SOLD
37886 B737-800 Air China 18-Oct 8 Extension SOLD
769 A330-300 China Airlines 18-Dec 12 Extension SOLD
3430 A320-200 Wizz 19-Mar 11 FOL
4328 A320-200 IndiGo 20-Jun 10 FOL
33755 B777-300ER EVA Airways 20-Jul 12 FOL
4384 A320-200 IndiGo 20-Aug 10 FOL
35215 B737-800 Shenzhen 20-Dec 13 FOL
3895 A319-100 Brussels 21-Mar 12 Extension
35631 B737-800 XiamenAir 22-Aug 14 FOL
35543 B777-300ER Air France 23-May 14 SOLD
34270 B737-800 Gol 23-Oct 16 FOL
3293 A320-200 GetJet 23-Nov 16 FOL
34272 B737-800 Gol 23-Nov 16 FOL
3950 A319-100 Germania 24-Feb 15 SOLD
35066 B737-800 Gol 24-Aug 16 FOL
35226 B737-800 Sriwijaya Air 24-Oct 16 FOL
36816 B737-800 Sriwijaya Air 25-Dec 16
Source: World Star1) Lease terms described herein are assumed based on the terms of a letter of intent with GetJet and an assumed delivery to lessee in November 20172) Based on assumed delivery to lessee in December 20173) 75-day lease extension after this date followed by the 3-month remarketing period shown in the following column
October 2016
Sprint Spectrum
3.360% Notes 2023Spectrum backed Notes
$3,500MMJoint Lead Structuring Joint Lead Bookrunner
2014 Brazil
Rio Previdencia
Oil & Gas RoyaltiesUS $3.2BN
& BRL 2.4BN Joint StructuringJoint Bookrunner*
LatAM ABS
Mizuho Team ABS Credentials
2015 Peru
GyM Ferrovias
Urban Rail Project BondPEN 629,000,000
Sole StructuringSole Bookrunner*
2014 Peru
Abengoa Transmision Sur
Power Transmission Bond
US$432MM Joint Structuring
Joint Bookrunner*
June 2016 Mexico
Poinsettia
Sale and Lease BackSecuritization
US$ 530,800,000
Joint Bookrunner
May 2014
TAL 2014-2Container Lease
Securitization$238MM
Sole StructuringLead Bookrunner*
Jan 2015
GCA 2015-1Container Portfolio Sale Debt & Equity
$434MM
Sole StructuringSole Bookrunner*
Nov 2014
DFCF 2014-1Container Lease
Securitization$159MM
Sole StructuringSole Bookrunner*
Telecom
Container ABS
* These transactions were structured and executed by the SCG team during their tenure at BNP Paribas
Feb 2015
DCAL 2015-1
Aircraft Portfolio Sale Debt and Equity
$814MM
Sole StructuringLead Bookrunner*
Nov 2014
GAFS 2014-1Aircraft Lease Securitization
$602MM
Sole Financial AdvisorSole Arranger*
June 2015
ECAF 2015-1
Aircraft Portfolio Sale Debt & Equity
$1,573MM
Joint Bookrunner*
Sept 2013
EAFL 2013-1Aircraft Lease Securitization
$636MM
Joint Bookrunner*
Dec 2014
Eagle 2015-1
Aircraft Lease Securitization
$381MM
Sole StructuringLead Bookrunner*
Oct 2013
FAN 2013-1Aircraft Engine Securitization
$170MM
Sole Structuring Sole Bookrunner*
Aviation ABSNov 2016
BBIRD 2016-1
Aircraft Lease Securitization
$800MM
Joint Lead Structuring Joint Lead Bookrunner
Dec 2016
LAFL 2016-1Aircraft Portfolio Sale
Debt & Equity$928MM
Sole Structuring Sole Bookrunner
28
Jan 2013
AABS 2013-1Aircraft Lease Securitization
$650MM
Joint Bookrunner*
April 2017
TBOLT 2017-1Aircraft Portfolio Sale
Debt & Equity$436MM
Joint Lead Structuring Joint Lead Bookrunner
August 2017
TCF 2017-2Container Lease
Securitization$450MM
Sole StructuringJoint Bookrunner
2017 Peru
Line OneCPAO Purchaser
Structured Loan & WCF$316MM & $80MM
Sole Structuring Sole Bookrunner
Joint MLA
November 2017
SPRTE 2017-1Aircraft Lease Securitization
$585MMGlobal Coordinator
Left Lead Structuring Left Lead Bookrunner
1. AABS - 2013 GECAS aircraft portfolio ; 2. RISE - 2014 GECAS aircraft portfolio; 3. GAFS – 2014 GAP aircraft portfolio4. BBIRD – 2014 ALC aircraft portfolio 5. DCAL – 2015 DVB aircraft portfolio 6. ECAF – 2015 BBAM portfolio 7. DHAL – 2015 AWAS aircraft portfolio8. SAIL – 2015 BOC aircraft portfolio9. LAFL – 2016 GECAS portfolio10. DAE – 2016 Dubai Aerospace aircraft portfolio11. TBOLT – 2017 ALC portfolio
12. GFL – 2014 Aercap portfolio 13. KDAC – 2016 Aercap portfolio 14. MRLN – 2016 ACG Portfolio15. PINOT – 2017 ACG engages in portfolio sale process (Mizuho selected as sole advisor)
The Mizuho SCG team successfully executed the GFL, GAFS, BBIRD, DCAL, LAFL and TBOLT sales
Typical of the cross asset / investor pollination strategy, Mizuho’s SCG team also successfully closed the first ever container portfolio sale with an ABS E-Note
POLARIS – 2015 Buss container portfolio
Mizuho SCG team identified a syndicate of E-Note parties on ALC’s TBOLT transaction including all investors in the first round
Mizuho’s SCG team has established strong credentials both domestically in the US market as well as globally in running tight E-Note processes with a 100% conversion rate consistently achieving market-clearing purchase prices
Mizuho’s SCG team is the ONLY team that has stayed intact since 2013 and engages the various E-Note buyer accounts (over 175 domestic US names and over 70 foreign investors) through the global Mizuho sales force
In addition, Mizuho’s SCG team leverages its own relationships cultivated via the successful execution of multiple E-Note processes
Mizuho Team – The Leader in Aircraft Portfolio Sales
29
Since January 2013, the following ABS Equity Note Processes have been successfully consummated
Aviation ABS Equity Note Transactions (Mizuho has led more ABS equity portfolio sales than any other bank)
Portfolio Sale to Financial Investors / Lessor with Transfer of Servicing Responsibilities
InstitutionTotal Equity Placements
Mizuho Team 6GS 3Macquarie 2BAML 1Citi 1Element 1Pressprich 1Wells 1
Aircraft Portfolio Sale Rankings
Recent Recognition & Awards Won by Mizuho Team Members
30
Aircraft Lessor Finance Deal of the Year 2013
AABS 2013-1
Europe Deal of the year 2013
EMERALD 2013-1
Best Infrastructure Financing, Central America
Reventazon Finance Trust
US$ 135,000,000
Hydropower IDB-B Bond
Securitization Deal of the Year 2013
GCA 2013-1DFCF 2013-1
2013 Americas Deal of the Year
AABS 2013-1
Most Innovative Engine ABS since 2008
FAN 2013-1
Best Securitization House 2013
DFCF 2013-1
Financing Innovation of the Year
Rio Oil Finance Trust
US$ 4,200,000,000+
Oil & Gas Royalties Securitization Program
Structured Financing of the Year
Rio Oil Finance Trust
US$ 4,200,000,000+
Oil & Gas Royalties Securitization Program
Project Bond Deal of the Year
Odebrecht Offshore Drilling
US$ 1,690,000,000
Drilling Rig Bond
Infrastructure & Project Finance Deal of the Year in the Americas
Odebrecht Offshore Drilling
US$ 1,690,000,000
Drilling Rig Bond
Latin America Offshore Drilling Deal of the Year
Odebrecht Offshore Drilling
US$ 1,690,000,000
Drilling Rig Bond
Editor’s Deal of the YearLabrador (2016)
Deal of the YearBlackbird (2016)
Americas Editor's Award for Innovation
Mizuho Securities (2017)
Overall Debt Deal of the Year Sprite (2017)
Overall Deal of the YearThunderbolt (2017)
Editor’s Deal of the YearLabrador (2016)
Capital Markets Deal of the Year
Blackbird (2016)
Best Americas Deal of the Year
Labrador (2016)
Overall Deal of the Year Blackbird (2016)
SPRITE 2017-1: Structure Highlights
31
Liquidity Facility
9 months of interest on Series A & B - Covers interest on the Notes, senior hedge payments, if any, and required expenses. Scales down as the outstanding notes amortize
The Series A & B amortize straight-line over 13 years up to and including the expected final payment date and straight-line over 4 years after the expected final payment date | the Series C notes amortize based on a 7 years to zero schedule(3)
Note Amortization Schedule
Expected Final Payment Date
If the Notes remain outstanding after year 7, the transaction will sweep all residual cash flow to pay down the Series A, B and C
If the notes remain outstanding after year 7, pricing on the Series A & B will step up by 200bps
Step-Up Coupon
Maintenance Reserve
$10MM Initially funded from transaction proceeds (Excess maintenance reserve fund above the required amount cannot be released for the first 12 months of the transaction) | On-going required amount is based on 12 month look-forward mechanism and minimum reserve amount of $1MM – the maintenance forecast that drives on going look-forward mechanism is updated annually by World Star and verified by Alton
Calculated on a trailing 6 month basis - A DSCR below 1.20x results in a cash trap event until cured for three consecutive payment datesDSCR Test
Early Amortization Events
A DSCR below 1.15x or utilization during any period falls below 75% of the aircraft remaining in the pool (by count) will result in a full cash sweep –full cash sweep will end once DSCR / utilization threshold has been cured for 3 consecutive payment dates
Permitted dispositions of aircraft resulting in up to 25% of principal prepayments allowed in years 0-2 and 50% allowed until year 4; any principal prepayment outside of permitted dispositions will have a makewhole of T+50bps; no makewhole upon asset dispositions after year 4 (more call protection for debt investors compared to tiered concepts in recent mid-life transactions)
Prepayment
Security Deposits
The cash portion of security deposits ($9.2MM as of August 31, 2017) will be available as an additional source of liquidity to be used for the benefit of senior debt holders (must be used to cover top-of-the-waterfall expenses, senior note interest and liquidity facility repayment) and may be used to cover principal payments at the discretion of the equity holder
Prior to the anticipated repayment date, if any end of lease payments are not reinvested in the aircraft or credited to a lessee or purchaser, a pro rata portion of up to 105% of the allocable debt balance relating to such end of lease payment will be payable
Additional Protections
Greater of 1.50% of rents due & $2,500, plus;Greater of 1.50% of rents collected & $2,500;Senior 1.50% and sub 0.50% of gross disposition & excess proceeds
Servicer Fees
1) Based on the average of half-life base values of the aircraft determined as of June 30, 2017 by morten, beyer & agnew Inc. (“mba”), Aircraft Information Services, Inc. (“AISI”) and BK Associates, Inc. (“BK”), as adjusted for November 2017 projected maintenance status determined by Alton
2) 13 year straight line for 7 years and then 4 years straight line thereafter. No amortization will be payable on the first payment date for Series B & C3) 7 years straight line except that the remaining principal of the Series C will be targeted for payment on the ARD. No amortization will be payable on the first payment date for Series C
32
Rating Agency Due Diligence Meetings at World Star
Offices
September 11th – 13th
Non Deal Roadshow(Miami ABS Conference
& NY/NE Additional Meetings)
September 18th (Miami) & October 13th (NY / NE)
Finalized Term Sheet / Structure October 26th
US Roadshow (5 Days) & Subsequent Formal Announcement
Roadshow:November 8th – 14th
Announcement: November 15th
Finalized offering document and ancillary documentation necessary to launch transaction in 12 days
In the market for 7 business days from announcement to pricing
Execution Overview
The transaction represents the fastest aircraft ABS execution seen in the US capital markets (7 days in total) – 4 days of pre-marketing and 3 days of formal announcement to pricing
Key documentation including the offering memorandum were drafted and completed in a 2.5 week period – a record for aircraft ABS transactions
Transaction entered pre-marketing on November 8, comprising a deal roadshow across the West Coast, NY/New England and Mid-West
After announcement on November 15, the transaction attracted 90+ investors globally with IOIs from 27 investors across the US, Europe, Asia and Australia with multiple new aircraft ABS investors
IPT of mid/low 4s @ 2.1x oversubscription | low 6s @ 1.5x oversubscription | low 7s @ 2.7x oversubscription
The final orderbook represents one of the most widely distributed aircraft ABS financings to-date
Execution Highlights
Finalize Preliminary Offering Memorandum &
Begin PremarketingNovember 8th
Priced the Transaction November 17th
SPRITE 2017-1: Structure & Execution Timeline
SPRITE 2017-1: Structural Summary
33
SPRITE 2017-1: A 144A / Reg S Aircraft Structured Portfolio Offering of $585MM to Finance a Portfolio of 21 In-Demand Commercial Aircraft
Key Terms
Transaction Background
Sprite Aviation Holdings Designated Activity Company (“Sprite Holdings”) is a joint venture vehicle established between Oaktree Capital Management (UK) LLP (“Oaktree”) and World Star with the mandate to acquire mid-life aircraft
Sprite Holdings & SPRITE 2017-1 accumulated assets from the acquisition of an 18 aircraft portfolio and other opportunistic bilateral acquisitions
The transaction financed the 18 aircraft portfolio plus 3 additional aircraft purchased on a bilateral basis
Notes Series A Series B Series C
Size ($MM) 457 88 40
Rating(S&P / Kroll) Asf / Asf BBBsf / BBBsf BBsf / BB-sf
LTV(1) 65.9% 78.5% 84.3%
Yield 4.375% 6.250% 7.000%
Spread (over m/s) 226bps 413bps 497bps
Scheduled Amortization 13 Year Straight Line ( 7 years) / 4 Year Straight Line Thereafter(2)
13 Year Straight Line ( 7 years) / 4 Year Straight Line Thereafter(2) 7 Year Straight Line(3)
Expected Wtd. Average Life 5.0 Years 5.0 Years 3.6 Years
Expected Final (“ARD”) 7.0 Years 7.0 Years 7.0 Years
Legal Final Maturity 20 Years 20 Years 20 Years
Format of Offering 144A / Reg S Notes
Use of Proceeds To finance a portfolio of 21 aircraft to be owned by SPRITE Cayman and serviced by World Star
Global Coordinator, Left Lead Structuring Agent & Left Lead Bookrunner
Mizuho Securities USA LLC (“Mizuho”)
Liquidity Facility Sized based on 9 months of interest on the Series A & B notes (provided by DVB Bank SE, London Branch)
1) Based on the average of half-life base values of the aircraft determined as of June 30, 2017 by morten, beyer & agnew Inc. (“mba”), Aircraft Information Services, Inc. (“AISI”) and BK Associates, Inc. (“BK”), as adjusted for November 2017 projected maintenance status determined by Alton
2) 13 year straight line for 7 years and then 4 years straight line thereafter. No amortization will be payable on the first payment date for Series B 3) 7 years straight line except that the remaining principal of the Series C will be targeted for payment on the ARD. No amortization will be payable on the first payment date for Series C
Servicer World Star Aviation (UK) Limited (“World Star” or “WSA”)
Issuers Sprite 2017-1 Limited (“SPRITE Cayman”), a bankruptcy remote SPV incorporated under Cayman law and resident of Ireland for tax purposes
Sprite 2017-1 US LLC (“SPRITE US”), a limited liability company organized under the laws of Delaware and wholly owned sub of SPRITE Cayman
34
SPRITE 2017-1: Awards
Overall Debt Deal of the Year Sprite (2017)
