Avolon has agreed to acquire Castlelake Aviation Limited, which manages assets worth US$5.0bn, including 105 aircraft, commitments for 13 new-technology aircraft, and various other assets.
Castlelake’s portfolio consists of 68% narrowbody aircraft, 70% new technology aircraft, with an average aircraft age of 4.7 years and an average remaining lease term of 8.4 years.
The acquisition will enhance Avolon’s earnings growth and asset yield, supported by its strong balance sheet with US$8.2bn in available liquidity as of 30 June 2024.
The transaction is expected to close in Q1 2025 and includes US$3.3bn of transferable debt, providing a win-win outcome for all parties involved.
Andy Cronin, Avolon CEO, said: “This transaction accelerates our growth plans adding a portfolio of assets that will further strengthen our cashflow and earnings profile. Our balance sheet strength, high levels of liquidity, and established capital markets access have enabled us to acquire these assets. They are complementary to our existing portfolio and will increase our fleet at attractive yields, supporting our positive ratings trajectory.”
Joe McConnell, Castlelake Partner and Deputy Co-Chief Investment Officer said: “We’re pleased to collaborate with Avolon on this notable transaction, delivering what we believe is a win-win for all parties: returning capital to Castlelake’s and CA Ltd.’s investor stakeholders, position lessees for ongoing high-quality asset management services, and provide Avolon with a fleet of high-quality aircraft assets.”
