The Macquarie AirFinance shareholders will collectively contribute up to US$600 million of new equity to the business to facilitate its purchase of 53 current and next-generation commercial passenger aircraft and an order for 20 Boeing 737 MAX aircraft from Kuwaiti lessor ALAFCO.
The transaction will be supported with a US$1.65 billion acquisition facility, underwritten by BNP Paribas, Citibank, MUFG Bank, and Natixis.
Macquarie AirFinance provides aircraft leasing and financing solutions, with a portfolio comprised of 189 aircraft leased to 77 airlines across 47 countries. It also has a current order book of 59 Airbus A320neo and A220-300 aircraft.
Macquarie said the transaction, first announced in November, will enable the business to expand and diversify its fleet of aircraft. The business added that it would also improve the “emissions profile, scale, average age, remaining lease term, and order book size of Macquarie AirFinance as the recovery of the aviation sector gains pace”.
Jonathan Watkinson-Hall, head of asset finance at Macquarie Asset Management, said: “This strategic acquisition will enable Macquarie AirFinance to grow its network of customers globally while increasing its exposure to more efficient aircraft. As passengers return to the skies and investor appetite for transportation assets strengthens, we are excited to support Macquarie AirFinance as it acquires this attractive portfolio and positions for future growth.”
Dennis van Alphen, head of infrastructure investments at PGGM, added that the investment is in line with PGGM’s commitment upon becoming a shareholder in Macquarie AirFinance in 2019, which was to “finance the acquisition of young aircraft and to provide an attractive risk-return to our clients”.
“In the next decades, the global aviation industry will demand aircraft with an increasingly lower carbon footprint as the industry works towards its 2050 net zero target, as formulated by IATA member airlines in 2021,” he said.
Michael Weaver, head of global real assets at ART, said: “ART is pleased to increase its investment. The diversification of Macquarie AirFinance’s fleet into more efficient and lower-emissions aircraft is consistent with our broader strategies to lower net emissions across our portfolio, while never compromising on our members’ best financial interests.
“Our partnership with Macquarie and PGGM in Macquarie AirFinance continues to provide ART’s members an attractive investment into a unique asset with diversification benefits across our portfolio.”
ALAFCO shareholders approved the transaction on 27 December 2022, with completion expected during 2023 following the satisfaction of customary closing conditions.
