Oaktree Capital Management has committed $500 million to help form Sky Holding Co., a San Francisco-based airline leasing company formed by former executives of Pegasus Aviation.
Sky Holding Company and Oaktree Capital Management, L.P. are pleased to announce a new partnership with the goal of once again becoming the premier provider of capital to airlines around the world. Sky’s management team previously worked together at Pegasus Aviation and has invested with Oaktree since the mid 1990’s. Together they built Pegasus into one of the world’s largest commercial aircraft lessors before selling the company in 2007. The new $500 million investment from funds managed by Oaktree will enable Sky to finance over $2 billion of Boeing and Airbus aircraft annually, with sale/leaseback activities set to begin in the first quarter of 2010.
“Our team and Oaktree have a long and successful track record of partnering to invest in the aircraft industry,” said Rich Wiley, Sky’s founder and CEO. “It started when Pegasus was a young company in the 1990’s, and between 2004 and 2007, we executed on over $6 billion in aircraft transactions together. Today’s announcement signals the resumption of our activities and partnership which is positioned to make large commitments to assist the airlines with their growth requirements. Our airline customers and global lender network have always valued the strength and reliability of this combined team, and Sky will be another multi-billion dollar capital source for our customers as they seek to finance their Boeing and Airbus deliveries in a challenging environment.”
Aaron Bendikson of Oaktree Capital Management, L.P. reinforced this theme by adding, “Today’s announcement signals the recommencement of our long-standing partnership with Rich Wiley and his team. Sky’s broad customer base and lender network are complemented by our global reach and investment capability. Together we have the ability to move quickly and to be creative in order to address carriers’ financing needs.”
Sky is a full-service aircraft leasing company based in San Francisco with offices in Seattle, Miami, and Buenos Aires, with a European office opening in 2010. The management team, which had previously worked together at Pegasus Aviation, has over 90 years of combined industry experience. The team has collectively acquired over $10 billion of aircraft, has purchased and/or remarketed over 400 aircraft, and has developed relationships with over 30 commercial lenders and investment banks across Europe, Asia and North America. “Our airline customers require next-generation, fuel-efficient aircraft to thrive in this difficult market,” said Toby Bright, Sky’s head of marketing. “The demand is there; our goal is to make capital available to the airlines so that they can update and grow their fleets prosperously. While many aircraft lessors are wounded in one way or another, Sky is ready to serve its worldwide customer base without any legacy-related issues.”
Scott Weiss, who oversees Sky’s origination and capital markets group, continued, “We have a long and successful history of partnering with airlines, manufacturers, and lenders in order to finance aircraft deliveries and execute long-term sale/leaseback transactions. Sky and Oaktree have the financial strength and the creativity to once again become a dominant player in the sector. In this market, you have to be able to take on large positions and have the expertise to manage your way through a difficult time in the cycle.“
Oaktree is a premier global alternative and non-traditional investment manager with over $67 billion in assets under management as of September 30, 2009. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, high yield and convertible bonds, specialized private equity (including power infrastructure), real estate, emerging market and Japanese securities, and mezzanine finance. Oaktree was founded in 1995 by a group of principals who have worked together since the mid-1980s. Headquartered in Los Angeles, the firm today has over 580 employees and offices in 14 cities worldwide.