Caisse de dépôt et placement du Québec has partnered with GE Capital Aviation Services (GECAS), GE‘s aircraft leasing business, to create a global aircraft financing platform. The platform, to be capitalized at US$2 billion, will be named Einn Volant Aircraft Leasing. It will focus on acquiring fuel-efficient aircraft from airlines and leasing them back under long-term leases. GECAS will source the opportunities and invest alongside the platform. Caisse President and CEO Michael Sabia said the initiative will “provide financing solutions to airlines to help support the growth of their fleet and answer essential industry needs.”
CDPQ & GE Capital Aviation Services to join forces in creating USD 2-billion global aircraft financing platform
CDPQ to provide strategic capital over four years to create an aircraft leasing and financing platform alongside world class operator GECAS
Platform will provide GECAS with increased flexibility to support future growth
Investment marks new milestone in the strategic relationship between CDPQ and GE
JUNE 19, 2017
Caisse de dépôt et placement du Québec (CDPQ), a leading institutional asset manager, and GE Capital Aviation Services (GECAS), a world leading aircraft leasing company, announced today that they have signed a commitment letter to create a USD 2-billion global aircraft financing platform. The transaction is subject to conditions including any required regulatory approvals.
This new platform, to be named Einn Volant Aircraft Leasing (EVAL), will be involved in the acquisition of modern fuel efficient aircraft from a diverse set of global airlines and in leasing them back to such airlines under long-term leases. GECAS will source the transactions and, under a sistership condition, will invest in aircraft ownership opportunities alongside the platform to further align its interests with those of EVAL. GECAS will also act as servicer for the platform.
EVAL will provide GECAS with the flexibility to finance future growth and opportunities, while serving as an entry point for CDPQ into the aircraft leasing and financing industry. In addition, it represents a key step in the expansion of the strategic relationship between GE and CDPQ, which has been built over several years.
“This platform will provide financing solutions to airlines to help support the growth of their fleet and answer essential industry needs. The high-quality aircraft will be chosen for their ability to withstand short-term cyclicality in a sector underpinned by strong long-term growth drivers,” said Michael Sabia, President and Chief Executive Officer of CDPQ. “Through this platform, CDPQ’s stable capital and GECAS’ extensive expertise and network will combine to identify the best opportunities globally. Working with world class operators such as GE is a fundamental part of our investment strategy, and this announcement is yet another example of this strategy in action.”
“This new platform will enable continued growth and development of our global customer relationships,” said Alec Burger, President & CEO of GECAS. “We are delighted CDPQ will be our strategic partner in this exciting venture, which is a natural expansion of the relationship between the highly regarded pension fund manager and GE.”
Goldman Sachs & Co. LLC and Bank of America Merrill Lynch advised GECAS on the transaction. Clifford Chance, Milbank, Tweed, Hadley & McCloy, Torys, Walkers and Lavery provided legal advice. E&Y provided tax advice.
ABOUT CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC
Caisse de dépôt et placement du Québec (CDPQ) is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. As at December 31, 2016, it held C$270.7 billion in net assets. As one of Canada’s leading institutional fund managers, CDPQ invests globally in major financial markets, private equity, infrastructure and real estate. For more information, visit cdpq.com, follow us on Twitter @LaCDPQ or consult our Facebook or LinkedIn pages.
ABOUT GE CAPITAL AVIATION SERVICES
GE Capital Aviation Services (GECAS) is a world leader in aviation leasing and financing. With 50 years of aviation finance experience, GECAS offers a wide range of aircraft types including narrow-bodies, wide-bodies, regional jets, turboprops, freighters and helicopters, plus multiple financing products and services including operating leases, purchase/leasebacks, secured debt financing, capital markets, engine leasing, airframe parts management and airport/airline consulting. GECAS owns or services a fleet of over 1,950 aircraft (1,660 fixed wing/ 306 rotary wing) in operation or on order, plus provides loans collateralized on an additional ~400 aircraft. GECAS serves 264 customers in over 75 countries from a network of 26 offices. gecas.com
GE (NYSE: GE) is the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of knowledge, the “GE Store,” through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry. ge.com
For more information
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Photo courtesy of Reuters/Mike Blake