Jetrader - January/February 2009 - (Page 11) Aircraft Finance in an Uncertain Economy W i ith the official confirmation of a U.S. recession and economic panic spreading across the globe, financiers of industries across the spectrum are scrambling to figure out the best approach to an ever-changing market. Jetrader caught up with Bertrand Grabowski of DVB Bank and José Abramovici of Calyon—recent panelists at the ISTAT 15th European Conference in Prague—to get their take on the current financial situation and how it might f affect the airline industry. Thanks to Marc Allinson with Rolls-Royce for coordinating the interviews. i J Jetrader: There’s been a lot of news about the subprime lending mess i in the U.S. Why does this affect available financing for aircraft? Bertrand Grabowski: For years, the U.S. economy has grown on an orgy of credit to finance the lack of budget discipline in Washington and the desire of the American consumers to fill up larger homes with more and more useless gadgets. The U.S. finance industry has helped to recycle that huge debt to investors abroad and at home. The rating agencies have fueled illusions throughout the system while all were willingly ignoring the growing account deficit of the government and the negative saving rates at household. The subprime market is the largest and the first to collapse from the collective blindness explained above. It is not the last as we know. Now we are moving toward a frantic “de-leveraging.” Those who can borrow, accumulate cash and place it at central banks, and those who cannot simply go bust. Jetrader 11
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