Securitizability.com

Air France has successfully closed the first European issue of secured aircraft notes since 2000, becoming only the second European airline to use this financing structure. The deal consists of a securitisation of 16 aircraft arranged by lead managers Crédit Lyonnais and J.P. Morgan Securities. International law firm Freshfields Bruckhaus Deringer advised the two lead managers on the transaction. Skadden Arps Slate Meagher & Flom LLP advised Air France.

The senior tranches of the note issue were twice oversubscribed despite the severe downturn in the airline sector and were wrapped by MBIA to triple-A level. There were three classes of notes offered to the market through a special purpose vehicle, the proceeds of which will fund limited recourse loans to 16 Irish SPV’s. Each SPV will buy one aircraft from Air France and resell it to Air France under a VARP (vente avec clause de réserve de proprieté) agreement, allowing the SPV to retain title to the aircraft while Air France pays for it in quarterly instalments over 10 years with ownership transferring when the last instalment is paid, which is also when the securitisation matures.

Rex Rosales, the partner who led the Freshfields Bruckhaus Deringer team, said, ‘We are very pleased to have helped bring this transaction to such a successful conclusion, and to have assisted Air France in diversifying its funding sources. Our team’s experience in similar structures was invaluable during this complex deal.’

James Healy, the partner who led the team from Skadden Arps Slate Meagher & Flom LLP team, commented: ‘We were very pleased to have advised Air France on this complex, benchmark deal.’ Air France was also advised by Pascal Bine (European counsel) assisted by Stephane Heliot and Xenia Legendre in Paris and by Nikolas Colbridge in London.

Rex Rosales led a team including partner Simeon Rudin, senior associates Chris Barratt and Sandrine Sauvel and associates Graeme McLellan and Yun Hui Teoh in London and partner Jean-Luc Michaud and associate Sophie Perus in Paris. Peter Green and Fiona Atkinson advised Deutsche Trustee Company Limited, as Security Trustee.

MBIA was advised by Linklaters, with Bertrand Andriani (partner) and Felix Samathy in Paris and Robert Fugard (partner) and Tess Weill in London.

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Air France secures €435m aircraft funding