KKR and AV AirFinance Agree to Purchase CIT Aviation Lending Portfolio
CIT Group Inc. has agreed to sell its aviation loan portfolio, valued at nearly $800 million, to KKR. The portfolio comprises over 50 loans for approximately 60 commercial aircraft, featuring an average yield in the mid-single digits and an average remaining term of about four years. The transaction will facilitate CIT's exit from its aircraft lending business and allow it to refocus on core sectors. AV AirFinance will service the loans, leveraging its aviation expertise. Completion of the transfer is anticipated by the end of Q2 2021.
- Sale of aviation loan portfolio valued at nearly $800 million
- Transaction allows CIT to rebalance portfolio and reinvest in core businesses
- AV AirFinance, co-established with KKR, will service the loans, ensuring expert management
- CIT will fully exit its aircraft lending business, losing associated revenue streams
NEW YORK, June 11, 2021 /PRNewswire/ -- CIT Group Inc. (NYSE: CIT) today announced it is selling its aviation loan portfolio to KKR. This is related to a previously announced definitive agreement for a portfolio that has a committed loan balance of nearly
The portfolio will be serviced by AV AirFinance Limited (AV AirFinance), a global commercial aviation loan servicer established by a team of experienced industry professionals together with KKR. As part of the transaction, certain members of CIT's aviation team will also join AV AirFinance where they will focus on servicing and originating loans.
"We are pleased to have reached an agreement with a team that understands the aviation lending business and will serve customers well," said Phil Robbins, CIT President of Asset Management and Capital Markets. "This transaction allows CIT to rebalance our portfolio mix and reinvest in core businesses."
Dan Pietrzak, Partner and Co-head of Private Credit at KKR, commented: "The purchase of this loan portfolio from CIT will be used to seed the launch of our aviation lending business in partnership with AV AirFinance. This transaction marks an exciting new expansion of our asset-based finance strategy into directly originated and held commercial aviation loans, and we believe AV AirFinance is well positioned to become a premier lender for the global commercial aviation market."
The majority of loans have been transferred with the remaining amount expected to be completed by the end of the second quarter of 2021. Upon its completion, CIT will have fully exited its aircraft lending business and remains committed to providing banking and advisory services as part of its core Aerospace, Defense and Government Services business.
The transaction is being funded by separate accounts managed by KKR.
About CIT
CIT is a leading national bank focused on empowering businesses and personal savers with the financial agility to navigate their goals. CIT Group Inc. (NYSE: CIT) is a financial holding company with over a century of experience and operates a principal bank subsidiary, CIT Bank, N.A. (Member FDIC, Equal Housing Lender). The company's commercial banking segment includes commercial financing, community association banking, middle market banking, equipment and vendor financing, factoring, railcar financing, treasury and payments services, and capital markets and asset management. CIT's consumer banking segment includes a national direct bank and regional branch network. Discover more at cit.com/about.
About KKR
KKR is a leading global investment firm that offers alternative asset management and capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR's insurance subsidiaries offer retirement, life, and reinsurance products under the management of The Global Atlantic Financial Group. References to KKR's investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR's website at www.kkr.com and on Twitter @KKR_Co.
About AV AirFinance Limited
AV AirFinance Limited is a commercial aviation loan servicer established in partnership with KKR. AV AirFinance provides secured financing solutions to airlines, lessors, manufacturers, and investors. The team at AV AirFinance has decades of experience structuring commercial aircraft loans and, through its partnership with KKR, has the financial strength and the ability to provide competitive financing along with knowledge to successfully participate in the global commercial aviation lending space. AV AirFinance maintains offices in Ireland and the US. For more information, please visit www.avairfinance.com.
Media Contacts:
For CIT:
Gina Proia
(212) 771-6008
gina.proia@cit.com
For KKR:
Cara Major or Miles Radcliffe-Trenner
(212) 750-8300
media@kkr.com
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SOURCE CIT Group Inc.
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