Macquarie AirFinance shareholders, Macquarie Asset Management, PGGM Infrastructure Fund and Australia Retirement Trust are contributing up to $600m (€576m) to help the aircraft lessor acquire a $2.2bn aircraft portfolio from ALAFCO Aviation Lease and Finance.
The shareholders’ equity investment, together with a $1.65bn acquisition facility, will be used to pay for Macquarie AirFinance’s acquisition of 53 commercial passenger aircraft and an order for 20 Boeing 737 MAX aircraft from the Kuwaiti leasing and financing firm.
The acquisition facility is underwritten by BNP Paribas, Citibank, MUFG Bank, and Natixis.
The acquisition, which was approved by ALAFCO shareholders late last month, is expected this year.
Founded in 2006, Macquarie AirFinance is a provider of aircraft leasing and financing solutions, with a portfolio comprised of 189 aircraft leased to 77 airlines across 47 countries. This acquisition is expected to help further expand and diversify the firm’s fleet of aircraft while improving the emissions profile, scale, average age, remaining lease term, and order-book size of the company.
Macquarie holds a 50% stake in Macquarie AirFinance alongside Dutch asset manager PGGM and Australia Retirement Trust which each own a 25% stake.
Jonathan Watkinson-Hall, the head of asset finance at Macquarie Asset Management, said: “This strategic acquisition will enable Macquarie AirFinance to grow its network of customers globally while increasing its exposure to more efficient aircraft.
”As passengers return to the skies and investor appetite for transportation assets strengthens, we are excited to support Macquarie AirFinance as it acquires this attractive portfolio and positions for future growth.”
Dennis van Alphen, the head of infrastructure investments at PGGM, said: “With this investment, PGGM Infrastructure Fund follows through on its commitment made at the time of becoming a shareholder in Macquarie AirFinance in 2019 – to finance the acquisition of young aircraft and to provide an attractive risk-return to our clients.
”In the next decades, the global aviation industry will demand aircraft with an increasingly lower carbon footprint as the industry works towards its 2050 net-zero target, as formulated by IATA member airlines in 2021. In that context, PGGM Infrastructure Fund will expect all of its investee companies to develop a credible long-term CO₂ reduction strategy before 2030 to align themselves with the Paris Climate Agreement, so they meet our client PFZW’s climate ambition.’’
Michael Weaver, the head of global real assets at Australia Retirement Trust, said: “Australia Retirement Trust is pleased to increase its investment. The diversification of Macquarie AirFinance’s fleet into more efficient and lower-emissions aircraft is consistent with our broader strategies to lower net emissions across our portfolio, while never compromising on our members’ best financial interests.
”Our partnership with Macquarie and PGGM in Macquarie AirFinance continues to provide Australia Retirement Trust’s members an attractive investment into a unique asset with diversification benefits across our portfolio.”
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