ST Engineering announces sale of 30 aircraft engines:
22 February 2020: In order to free up capital for future investments ST Engineering has entered into agreements for the sale of 30 aircraft engines using a securitisation structure.
The transaction comprises a diversified portfolio of 30 aircraft engines that power primarily narrow body aircraft leased to 13 airlines across 11 countries, with a weighted average remaining lease term of about 6 years. The structure includes about US$257m (approximately S$358m) of fixed rate notes offered in three tranches, and the placement of equity notes. It is anticipated that TEAM will retain 10% of the equity notes while an affiliate of Marubeni Corporation and one or more other investors will purchase the balance, subject to the satisfaction of customary closing and settlement conditions.
Mr Lim Serh Ghee, President of ST Engineering's Aerospace sector said, "This sale will represent a major milestone for our engine leasing business. It will allow us to lower our capital requirements for continued engine investments, while retaining TEAM's asset manager role to create value for lessors through our innovative asset management solutions."
This is ST Engineering's first securitisation transaction and the first engine-backed securitisation originated by a lessor headquartered in Asia Pacific.
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