Friday, the listed giant of personal and commercial banks CIT Group announced the sale of its aviation loan portfolio, comprising nearly $ 800 million in assets on 50 loans for approximately 60 commercial aircraft, to private equity giant KKR. According to CIT’s announcement confirming the deal, the loans have an average yield in the mid-range figure and an average remaining term of about four years.
The wallet will serve as the basis for KKR’s new aviation loan service, AV AirFinance Limited. As part of the transaction, selected members of CIT’s aerospace team will also join AV AirFinance, where they will focus on management and lending.
âWe are delighted to have entered into an agreement with a team that understands the aviation lending industry and will serve clients well,â said Phil robbins, CIT President of Asset Management and Capital Markets. âThis transaction allows CIT to rebalance the composition of our portfolio and reinvest in its core businesses. “
âAV AirFinance is an exciting expansion of our asset-based financing strategy into directly generated commercial aircraft loans, which represent a attractive investment opportunity protected in the event of a downturn for our long-term capital, âsaid Dan Pietrzak, Partner and Co-head of Private Credit at KKR.
The transaction marks the expansion of KKR’s long-standing financing strategy based on assets in commercial aviation loans issued and held directly. Pietrzak added that he was convinced that AV AirFinance was well positioned to become a leader in the global commercial aviation market.
Launch of dedicated aviation lending platform marks an important milestone for KKR in the aviation industry, building on our experience in areas such as commercial aircraft leasing and private aviation “Said KKR Principal Patrick clancy, in a separate comment. âWe are delighted to partner with the AV AirFinance team to offer differentiated solutions to the market, and we see significant future growth opportunities supported by a significant market opportunity and favorable long-term outlook for the company. commercial aviation industry. “
AV AirFinance will be headed by the Managing Director Siggi kristinsson, an industry veteran who recently co-founded and served as CEO of the Swedish company Volito Aviation Services AB, a subsidiary of the investment firm that provides debt origination and advisory services to Goldman Sachs and other financial institutions. It will be backed by a team of aircraft finance specialists with decades of experience in secured loans totaling over $ 25 billion over multiple market cycles.
The acquisition is yet another bullish call on aviation space for KKR. Earlier this week, KKR bought Atlantic Aviation, Macquarie’s longtime private jet firm, for nearly $ 4.5 billion in cash and debt.