KKR Launches AV AirFinance, A New Commercial Aviation Lending Platform

Rhea-AI Summary

KKR has launched AV AirFinance Limited, a commercial aviation loan servicer, with expertise in structuring commercial aircraft loans. This new platform aims to offer innovative financing solutions to the aviation sector, supported by a nearly $800 million loan portfolio acquired from CIT Group, consisting of over 50 loans for approximately 60 commercial aircraft. Led by industry veteran Siggi Kristinsson, AV AirFinance is positioned to meet the growing demand for flexible financing solutions in the commercial aviation market.

Positive

• Launch of AV AirFinance enhances KKR's presence in the aviation finance market.
• Acquisition of a nearly $800 million loan portfolio from CIT Group strengthens AV AirFinance's financial foundation.
• The seasoned team at AV AirFinance brings over $25 billion in secured lending experience.

Negative

• None.

KKR, a leading global investment firm, today announced the launch of AV AirFinance Limited (“AV AirFinance”), a global commercial aviation loan servicer established by a team of experienced industry professionals together with KKR. The new secured loan servicing platform combines stable, long-term capital and decades of experience structuring commercial aircraft loan transactions to offer creative and innovative financing solutions to commercial aviation customers around the world.

To support the launch, KKR and AV AirFinance have agreed to purchase a nearly $800 million portfolio of aviation loans from CIT Group, including over 50 loans for approximately 60 commercial aircraft. The loans in the portfolio have an average yield in the mid-single digits and an average term remaining of approximately four years.

AV AirFinance is led by Chief Executive Officer Siggi Kristinsson, an industry veteran who most recently co-founded and served as CEO of Volito Aviation Services AB, a company providing debt origination and advisory services to Goldman Sachs and other financial institutions. Mr. Kristinsson is supported by a seasoned team of aircraft financing specialists with decades of experience in secured lending totaling over $25 billion in value across multiple market cycles. Ryan Jasinski joins the AV AirFinance team from CIT as part of the related portfolio purchase and will continue to focus on loan origination in the Americas. Per Waldelof, former president of PK AirFinance, serves as a consultant advising on loan origination and other aspects of AV AirFinance’s operations.

AV AirFinance will support a wide array of commercial clients, including airlines, cargo operators, lessors, manufacturers and investors, across all aspects of the ownership cycle, including PDP, acquisition, leasing, conversion, and tear down. Through its partnership with KKR, AV AirFinance has global origination capabilities and the financial strength to arrange longer-term, flexible, and competitive financing for a broad range of single aircraft and large portfolio transactions.

“AV AirFinance is an exciting expansion of our asset-based finance strategy into directly originated commercial aircraft loans, which represent an attractive downside protected investment opportunity for our long-term capital,” said Dan Pietrzak, Partner and Co-head of Private Credit at KKR. “We are delighted to be partnering with Siggi and his experienced team to build a new leading loan servicing platform for the commercial aviation market.”

Mr. Kristinsson said, “We are very excited to be entering the market at this time to participate in the social and economic recovery, which is driving demand for commercial aviation and increasing the importance of the long-term financing solutions that support the industry. With our strong foundation, experienced team and the support of KKR, AV AirFinance is well positioned to deliver tailored lending options and flexible terms that enable commercial aviation customers to achieve their business goals.”

Patrick Clancy, Principal at KKR, added: “The launch of a dedicated aviation lending platform marks a significant milestone for KKR in the aviation sector, building on our experience in areas including commercial aircraft leasing and private aviation. We are thrilled to partner with the AV AirFinance team to offer differentiated solutions to the market, and we see significant opportunities for future growth supported by a large market opportunity and the favorable long-term outlook for the commercial aviation industry.”

The portfolio acquisition from CIT is being funded by separate accounts managed by KKR. AV AirFinance is KKR’s latest investment in the aviation sector and follows investments in Altitude Aviation, Altavair, KKR DVB Aviation Capital, K2 Aviation, DCAL Aviation, Wheels Up, Global Jet Capital and JetEdge, among others.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210611005096/en/

FAQ

What is the purpose of KKR's AV AirFinance Limited?

KKR's AV AirFinance Limited aims to provide innovative financing solutions for the commercial aviation sector.

How much did KKR invest in the aviation loan portfolio?

KKR invested nearly $800 million in a portfolio acquisition from CIT Group.

Who leads AV AirFinance Limited?

AV AirFinance Limited is led by Siggi Kristinsson, an experienced industry professional.

What types of clients will AV AirFinance serve?

AV AirFinance will serve airlines, cargo operators, lessors, manufacturers, and investors.

What is the expected yield on the aviation loans acquired by AV AirFinance?

The acquired loans have an average yield in the mid-single digits.