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KKR Launches AV AirFinance, A New Commercial Aviation Lending Platform

June 14, 2021, 07:12 AM
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KKR announced the launch of AV AirFinance Limited, 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 – as reported June 11 by ABL Advisor – 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. 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.”

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.

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