Avolon launches $5.5 billion term loan B at Libor plus 325 bps

By Sara Rosenberg

New York, Jan. 9 – Avolon launched on Monday its $5.5 billion five-year senior secured first-lien term loan B with price talk of Libor plus 325 basis points with a 0.75% Libor floor and an original issue discount of 99, according to a market source.

The term loan B has 101 soft call protection for six months and amortization of 1% per annum, the source said.

Financial covenants include maximum loan-to-value ratio, maximum average age of aircraft and collateral concentration ratios.

Morgan Stanley Senior Funding Inc., UBS Investment Bank, Barclays, J.P. Morgan Securities LLC, BNP Paribas Securities Corp., Credit Agricole CIB and SunTrust Robinson Humphrey Inc. are the joint lead arrangers and bookrunners on the deal.

Commitments are due on Jan. 19, the source added.

Proceeds will be used to partially finance the acquisition of CIT Group Inc.’s commercial aerospace leasing business for $10 billion.

Other funds for the transaction will come from senior notes.

The transaction is expected to close this quarter, subject to customary conditions and regulatory approvals.

Avolon is an Ireland-based provider of aircraft leasing and lease management services.

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