Aircraft Portfolio Securitization: Innovations and Regulations

Aircraft portfolio securitizations are an attractive financing option for an aircraft leasing company or investors who are looking to finance a diversified portfolio of aircraft on lease to various operators. Securitizations are used for a variety of purposes, including providing long-term financing for continued ownership of a pool aircraft; raising capital for a new portfolio of aircraft to be acquired over a nine- to 12-month period; and providing financing for a new equity investor or other party in connection with the acquisition of an aircraft pool. This article highlights the advantages of securitizations in debt markets, enhancements to the securitization models for issuers and services, securitization enhancements for noteholders and lenders, and the new regulatory requirements that have arisen in the wake of the financial crisis and Dodd–Frank Wall Street Reform and Consumer Protection Act.