Caisse de dépôt et placement du Québec (CDPQ) and GE Capital Aviation Services (GECAS) have signed a commitment letter to create a US $2 billion global aircraft financing platform, Einn Volant Aircraft Leasing (EVAL).
CDPQ will provide strategic capital over four years to EVAL alongside GECAS. GECAS, the U.S. and Irish commercial aircraft financing and leasing business of GE, has a fleet of over 1,950 aircraft (~1,700 fixed wing/ ~250 rotary wing) in operation or on order, plus provides loans collateralized on an additional ~400 aircraft.
Einn Volant Aircraft Leasing will be involved in the acquisition of modern fuel efficient aircraft from a diverse set of global airlines and in leasing them back to such airlines under long-term leases. GECAS will source the transactions and, under a sistership condition, will invest in aircraft ownership opportunities alongside the platform to further align its interests with those of EVAL. GECAS will also act as servicer for the platform.
EVAL will provide GECAS with the flexibility to finance future growth and opportunities, while serving as an entry point for CDPQ into the aircraft leasing and financing industry. In addition, it represents a key step in the expansion of the strategic relationship between GE and CDPQ, which has been built over several years.
“This platform will provide financing solutions to airlines to help support the growth of their fleet and answer essential industry needs. The high-quality aircraft will be chosen for their ability to withstand short-term cyclicality in a sector underpinned by strong long-term growth drivers,” said Michael Sabia, President and Chief Executive Officer of CDPQ. “Through this platform, CDPQ’s stable capital and GECAS’ extensive expertise and network will combine to identify the best opportunities globally. Working with world class operators such as GE is a fundamental part of our investment strategy, and this announcement is yet another example of this strategy in action.”
“This new platform will enable continued growth and development of our global customer relationships,” said Alec Burger, President & CEO of GECAS. “We are delighted CDPQ will be our strategic partner in this exciting venture, which is a natural expansion of the relationship between the highly regarded pension fund manager and GE.”
Goldman Sachs & Co. LLC and Bank of America Merrill Lynch advised GECAS on the transaction. Clifford Chance, Milbank, Tweed, Hadley & McCloy, Torys, Walkers and Lavery provided legal advice. E&Y provided tax advice.