Stellwagen Capital believes its first fund can exploit an air finance gap to grow its business by delivering new financing structures to both airlines and leasing companies.
“The effective closure of the European and U.S. Export Credits Agencies, along with the retrenchment of the commercial aviation banks post Lehman Brothers, has created a real opportunity to grow our business,” says Stellwagen Group’s chief executive officer, Douglas Brennan.
The company recently launched a new fund, Stelloan Investment Company I, and closed its first loan transaction with operating lessor CALC.
The initial size of the fund is $200 million, according to Stellwagen Capital’s chief executive officer, Howard Millar.
“We plan to issue $200 million by the end of September and be close to $1 billion in the first half of 2018,” he says.
Investors will be a mix of insurance companies, pension funds, banks, and family office investors, he adds.
The senior loan investment vehicle will target A320-family and Boeing 737 narrowbodies.
The fund has already unveiled its first commercial debt transaction: two new Airbus A321s for operating lessor CALC.
The 10-year loan has a balloon structure, which is an attractive financing option for many leasing companies and airlines as it lowers cash outflows during the tenor of the loan.
The transaction is part of a two-aircraft financing between the parties. The first aircraft delivered earlier this year. A second A321 will be financed for CALC in late September.
“This new senior loan product delivers innovative and bespoke financing to airlines and lessors, secured against high quality and liquid aircraft collateral, like the Airbus A321. We have a pipeline of similar opportunities, which we will execute over the coming months,” says Millar.
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