Irish aircraft lessor SMBC Aviation Capital raises €1.4bn

Irish aircraft lessor SMBC Aviation Capital has raised $1.5 billion (€1.4 billion) in a five-year global syndicated finance facility.

The transaction includes 29 financial institutions, 13 of which are new banking relationships for SMBC Aviation Capital.

The senior syndication phase of the transaction included participation from 10 banks, while the general syndication phase of the transaction included participation from a further 19 banks.

The syndicated finance facility comprises a $375 million term loan and a $1.125 billion revolving credit facility with a consortium of American, Asian, Australian, European and Middle East banks.

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SMBC Aviation Capital chief financial officer Aisling Kenny said: “This transaction represents a further milestone in our syndicated banking programme and demonstrates our ability to raise large scale, competitively priced capital.

“The deal is global in nature and further increases the diversification of our banking relationships, as we welcomed 13 new banking partners as part of the syndication.

“The revolving credit facility which forms 75 per cent of this transaction will provide further operational flexibility for the future liquidity needs of SMBC Aviation Capital.”

Profits at SMBC Aviation Capital grew 35 per cent to a record $460 million in the 12 months ended March 31st.

The company buys aircraft from manufacturers Airbus and Boeing that it leases to airlines around the world. The company said revenues from leasing aircraft rose 41 per cent to $1.9 billion in its last financial year.

Profit before tax climbed 35 per cent to $460 million, which SMBC noted was a record. That excludes a $756 million settlement it received from insurers last October relating to 16 aircraft that SMBC had previously leased to Russian airline Aeroflot, which brought the company’s total pretax surplus to $1.2 billion.

That settlement, with Russian business Insurance Company NSK, related only to SMBC’s claims under Aeroflot’s insurance and reinsurance claims. The company is continuing to pursue other insurance claims.

SMBC was one of several Irish companies in its business that terminated aircraft leases to Russian airlines following the country’s invasion of Ukraine in February 2022 to comply with sanctions. Many of the planes remained in Russia as the lessors were unable to retrieve them.

SMBC agreed $5 billion worth of leases last year and delivered aircraft to 18 different customers. The company has 271 aircraft on order from Airbus and Boeing.

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