Flying high with a new mode of US aviation finance
A novel finance structure used commercial non-payment insurance as an alternative to a government export credit guarantee.
A new 747-8i aircraft purchase sought another source of credit support
ING Capital wanted to offer longer-term competitive pricing to its airline customer while simultaneously mitigating certain lending risks. We pioneered the first use of a new type of financing with commercial non-payment insurance as an alternative to using a government export credit guarantee.
Negotiating the first aircraft financing with commercial non-payment insurance
Our team negotiated the first commercial insurance policy, underwritten by three separate highly rated private insurers, to function as an equivalent of a government guarantee, in the heavily regulated insurance and aviation industries, while also addressing the challenges of multiple, overlapping regulatory regimes. Extensive negotiations and careful documentation resolved additional, complex questions, resulting in a new, flexible structure.
Transaction successfully opened a new segment of aviation finance
As the first real-world test of this new deal structure, ING Capital financed the purchase of the large aircraft asset with fixed-rate debt over a 12-year term at favorable pricing and competitive terms. The transaction created a cost-effective, flexible financing alternative for financing future aircraft deliveries.