US-based aircraft lease company BBAM and its partner Nomura Babcock & Brown (NBB) have closed a Japanese operating lease with call option (JOLCO) transaction with British Airways for an A350-1000.
The firms closed the first JOLCO in a transaction worth $1.12bn, which is a combination of senior secured enhanced equipment trust certificates (EETC) and JOLCO equity regarding several new generations of British Airways-operated aircraft.
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The deal will see financing for two A320neo and six A350-1000 aircraft. The planes will be financed from the proceeds drawn through the British Airways 2019-1 EETC certificates and JOLCO equity, which is arranged by NBB and BBAM.
BBAM CEO Steve Zissis said: “BBAM structured the JOLCO element of this transaction and we are delighted to further build on our strong relationships with British Airways and IAG.
“The combination of EETC debt and JOLCO equity is an innovative structure that we have helped develop to provide our clients with flexible financing solutions.”
Citigroup served as the only structuring agent. It also acted as joint bookrunner for the EETC deal along with Credit Suisse. Deutsche Bank, Goldman Sachs, and Morgan Stanley served as the passive bookrunners.
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By GlobalDataBBAM served as the structuring agent for NBB and the JOLCO equity investors.
In March 2018, BBAM and NBB announced its participation in an $870m deal that combines senior secured EETC and JOLCO equity for a new generation of British Airways aircraft.
BBAM has been working with NBB for 30 years, offering origination, management and remarketing services to more than 2,000 investors.
