California-based lessor Aviation Capital Group (ACG) announced Sept. 9 that majority
shareholder Pacific Life Insurance Co. has entered into an agreement in which Tokyo
Century Corp. will acquire from Pacific Life all of its outstanding interest in ACG.
Tokyo Century initially acquired from Pacific Life a 20% interest in ACG in 2017 and had
since contributed additional equity capital to ACG, increasing ownership to 24.5%. ACG is the 11th-largest aircraft lessor globally, based on the number of aircraft owned and
managed.
The purchase price is approximately $3 billion and the deal is expected to close in
December. The purchase is expected to be funded with cash on hand and bridge loans at
closing, and the deal will later be refinanced in stages through permanent financing that
may include bank loans and various hybrid financing.
The ACG aircraft portfolio includes B747-8 freighter aircraft. In late February,
ACG announced that it has structured, arranged and provided a guarantee of a loan
by Japan’s MUFG Bank, a subsidiary of Mitsubishi UFJ Financial Group, to finance a
portion of the purchase price of one B-747-8 freighter aircraft delivered to AirBridgeCargo
Airlines (ABC), part of Volga-Dnepr Group.
The ABC financing utilized ACG’s Aircraft Financing Solutions (AFS) program, which
complements the lessor’s operating lease business by providing cost-effective aircraft
financing.
Japanese investors have emerged as front-runners in aviation finance. In early March,
Germany’s DVB Bank, a specialist transport finance provider, penned an agreement
with MUFG Bank and BOT Lease, an affiliate of MUFG, for the sale of DVB’s aviation
finance division.
The sale of DVB Bank to MUFG is another milestone for the aviation finance industry, as it
marks the departure from the market of the last major German aircraft finance specialist.
Tokyo Century acquires lessor ACG
Aviation Capital Group is the 11th-largest aircraft lessor globally and is being acquired for approximately $3 billion.
