ADGM-based lessor Sirius closes bank loan with Deutsche Bank to refinance jet acquisition

Aircraft lessor Sirius Aviation Capital Holdings has said one of its joint venture units closed its first bank facility with Deutsche Bank to refinance the acquisition of five narrow-body aircraft that it acquired in 2020.

The five aircraft are on operating leases to three different carriers: three Boeing 737 Next-Generation jets with Texas-based Southwest, one Airbus A320 with Florida-based Spirit Airlines and another A320 with Abu Dhabi's Etihad Airways, Sirius said on Wednesday.

"Establishing this banking relationship is a significant milestone for the business," Kieran Ryan, chief financial officer of Sirius, said. "The successful conclusion of this debt transaction is both an endorsement of the underlying strength of the market for mid-life aircraft and Sirius business strategy of leasing to top tier operators of these aircraft."

The Covid-19 pandemic is the worst crisis to hit the aviation industry, with airlines, plane makers, lessors and other companies in the supply chain hit hard after demand for air travel fell last year. Cash-strapped airlines have deferred payments to lessors, which have shored up funding, and delayed taking deliveries from Boeing and Airbus.

However, the global aviation industry is recovering in fits and starts as countries press ahead with Covid-19 vaccine campaigns and ease some travel restrictions. Boeing raised its 20-year forecast for commercial plane demand, citing signs of recovery from the pandemic, improving global economic growth and a shift by airlines to newer, greener aircraft.

Sirius’ share of this joint venture was funded through a commitment by its anchor investor Abu Dhabi Catalyst Partners, a joint venture between Mubadala Investment Company and US investment company Falcon Edge.

Sirius began operations at the Abu Dhabi Global Market (ADGM) in March last year soon after the onset of the Covid-19 pandemic. The company aims to double its fleet to 25 aircraft in the next 12 months and to more than 100 over the next three years.

"Looking forward, we have a strong pipeline of attractive investment opportunities which we will deliver on in the coming months," Mr Ryan said.

"We anticipate that air traffic volumes will continue to rise as vaccines are rolled out globally, and we plan to take advantage of this recovery to double our fleet ... We also will continue to work closely with our investors, shareholders and the ADGM team to deliver these ambitious targets.”