Jetrader - January/February 2012 - 8

past. This is why we’re looking at where that liquidity shifts. We look at what happened after the 2008 crisis. The ECAs around the world really stepped in to support, kept

the funding sources viable and stabilized the market. Their volume in 2011 was quite high already. We’re heading into a similar situation in 2012, and we’re conﬁdent the

ECAs will be there again. 2012 is the year that we all need to develop funding sources because 2013 will see ECA products become more expensive with the new ASU terms.”

On what will make up the differ-

Greg Lee, Head of Trade, Transport and Infrastructure Finance, Goldman Sachs

ence in traditional bank support heading into 2012 and beyond…
“We do think that the decrease in traditional bank market appetite is secular, not cyclical. We think it’s something that is driven by broader market forces like capital requirements that ﬁnancial regulators are imposing on banks globally, so sectors bigger and deeper than aviation are experiencing the same kind of phenomenon. Our belief is that cap markets will be a very important source of capital for our space, and I think that also means that leasing companies are going to be an important source of capital for our space in general because of the role they play in the global aerospace supply chain. Leasing companies are generally better credits than airlines, so leasing companies therefore will be a good way to attract cap markets capital and be the intermediary between cap markets capital and global airline operator, most of whom are neither, one, rated by a credit agency or two, set up to be able to provide the kind of ﬁnancial disclosure and securities law operations required to access the capital markets. Most of the airlines outside of the U.S. will start to do more leasing, and the leasing companies themselves will be vehicles through which the capital markets can then participate in airlines outside of the U.S. The other topic is the fact that if the new ECA pricing regime post-2012 ends up being implemented the way it’s currently anticipated to be, and interestingly there are some people out there who think it won’t, but if it is, with its much higher pricing and risk mitigants like lower LTVs, we think a lot of the airline operators out there will be more tempted to do leasing.”

Aircraft Financing Environment: Boeing’s latest and widely shared “stoplight” view of aircraft ﬁnancing markets as of late 2011 shows conditions signiﬁcantly improved over the same point in 2010. Heading into 2012, concerns over Europe’s sovereign debt crisis ﬁnds the forecasted capital contributions from commercial banks to be somewhat down, led by expected lower participation by Europe’s commercial banks, long a stalwart in the aircraft sector. Boeing expects the world’s export-credit agencies, and the capital markets, to step up activity to make up any bank supply differences. (Source: Boeing)

2011/2012 Industry Delivery Financing: Boeing’s roll up of total commercial aircraft deliveries, based on available data from the manufacturers and other sources, shows a forecasted approximately $100 billion value for 2012 as builders step up production rates for many models. Contributions by commercial banks are expected to be down, forecasted to be replaced by support from the world’s export credit agencies and additional capital markets activity. (Source: Boeing)

8 The ofﬁcial publication of the International Society of Transport Aircraft Trading
http://www.ISTAT.org
Jetrader - January/February 2012

Table of Contents for the Digital Edition of Jetrader - January/February 2012
