Kaye Scholer’s work for SriLankan Airlines on a US$650 million financing transaction was recognized as the coveted “PDP Deal of the Year” at the 17th annual Airfinance Journal Deals of the Year Awards Dinner in Miami Beach on May 28. The transaction combined a pre-delivery payment (PDP) financing with the sale-leaseback long-term financing of five A330-300 aircraft with operating lessors AerCap and Hong Kong Aviation Capital and a lending syndicate led by Natixis and including Century Tokyo Leasing Corporation. The transaction closed December 18, 2014, when the aircraft delivery program commenced.
As part of its commendation, Airfinance Journal noted that the deal was particularly striking from a structuring perspective. The deal required significant attention and balancing of interests to ensure that the PDP lenders and ‘take-out’ sale/leaseback lessors were properly aligned using a complicated Delaware SPC novation structure for aircraft ownership in the build phase to deal with Sri Lankan “claw-back” risk. It also represented an unusual collaboration of major operating lessors on a single account, and then in the atypical role of PDP lenders. In addition to the level of intricacy and innovation we brought to the deal on behalf of our client, Airfinance Journal noted that the deal was marked-out because it will be highly beneficial for SriLankan Airlines, who in taking delivery of new aircraft for the first time in several years, and since the end of hostilities in the country’s bitter civil war, can now operate an increased fleet and route network more extensively and profitably, with an improved passenger experience.
Pre-delivery payment finance is a hot topic in the current cycle of extensive new aircraft orders, particularly in Asia, one of the practice’s key focus areas. The continual development of new financing products in this area in order to meet demand is something the firm is involved in on behalf of its aviation finance clients on an on-going basis.
Kaye Scholer was a sponsor of Airfinance Journal’s 35th Annual North America Airfinance Conference and the related awards dinner. This annual dinner is held to honor law firms, financial advisors and other key players in the aviation market. The dinner was attended by Kaye Scholer client SriLankan Airlines who collected the award, alongside Kaye Scholer Partners Henry Morriello, Lawton Camp and Philip Perrotta.
Perrotta, who is Co-Head of the firm’s Aviation Finance & Leasing Practice, led the Kaye Scholer team representing SriLankan Airlines on the transaction and was joined by Associate Manuela Krach in this winning deal. This impressive accolade further reinforces Kaye Scholer’s range of capability and involvement in complex and market-leading transactions for a broad international client base in the aviation market globally.
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