Milestone closes first Ex-Im bond for helicopters
Milestone Aviation has closed a $187.4 million bond guaranteed by the US Export-Import Bank for Sikorsky S-92 helicopters. The Dublin based helicopter lessor is the first company to use a capital markets Ex-Im guaranteed bond to purchase helicopters.
Deutsche Bank is sole structuring agent and lead bookrunner for the issuance which took place on May 22. The bond carries a coupon of 1.87 per cent.
The US Ex-Im bank guarantees the debt on exports to help make it easy for US companies to sell overseas. In this case, Milestone and Deutsche Bank have raised the cash to buy the helicopters from Sikorsky from bond investors. If Milestone defaults on the deal US Ex-Im, a division of the government, would pay them back. The structure gained popularity in the commercial jet market when Emirates issued a bond in 2009.
“Ex-Im Bank’s capital-markets financing has proven to be a successful way to fund exports of U.S.-made large commercial aircraft,” says Fred Hochberg, president and chairman of Ex-Im Bank.
Although they are guarantee by the US government, Ex-Im bonds price slightly above US Treasuries.
The lessor originally used a commercial bridge facility to finance the deliveries which began in November 2012. The helicopters will be placed with five customers based in the UK, Norway and Brazil.
Milestone has acquired more than 90 aircraft valued at more than $1.3 billion since the company launched in August 2010 with 21 customers in 20 countries.