PIMCO, a fixed income investment manager, and GE Capital Aviation Services (GECAS), a lessor and business unit of GE, announced they have reached a preliminary agreement to develop an aviation leasing platform to support up to $3 billion in aircraft asset financings. The transaction is subject to customary closing conditions and receipt of required regulatory approvals.
This strategic investment platform will enable GECAS and PIMCO-advised accounts to acquire new and young fuel-efficient aircraft to meet the needs of a diverse set of global airlines over many years.
The platform looks to provide much-needed financing for airlines which are looking to upgrade their fleets with young and new aircraft. The portfolio will initially focus on narrowbody aircraft while allowing flexibility to invest in attractive opportunities in the widebody market. PIMCO and GECAS will consider a range of investment criteria including an airline’s assets and credit quality and geographic factors.
PIMCO is already one of the world’s largest investors in aviation-backed debt and its presence in aviation financing markets combined with GECAS’ leadership role in the aircraft-leasing segment will provide this joint platform enormous flexibility to provide funding to the global airline industry. GECAS will source transactions for the platform, act as servicer and provide asset management services for the platform.
“As the airline industry struggles with the effects of the COVID-19 pandemic, the PIMCO-GECAS platform will inject essential liquidity into this critical industry by providing financing solutions at a time when there are fewer traditional financing options for airlines,” said Dan Ivascyn, PIMCO’s Group Chief Investment Officer. “Aircraft remain an attractive asset class in a critical infrastructure sector supported by solid long-term growth drivers. GECAS’ expertise as a world class aircraft lessor aligns with our longstanding investment strategy in aviation finance.”
“We are delighted to team up with a premier institutional investor such as PIMCO in this strategic relationship which will enable opportunistic plays to support our airline customers around the globe,” said Greg Conlon, President & CEO of GECAS. “While GECAS maintains an industry-leading position, this platform will ensure we can continue providing our airline customers with the aircraft needed to sustain their franchises.”
GECAS offers a broad array of financing products and services on these assets including operating leases, purchase/leasebacks, capital markets, and airframe parts management. GECAS owns, services or has on order approximately 1,700 aircraft. GECAS serves 220 customers in over 70 countries from a network of 17 offices around the world.