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.

Terry Spruce

Terry is Senior News Editor and writes for both Corporate Jet Investor and Helicopter Investor. He is also responsible for our helicopter guides. Terry has been an aviation enthusiast since the early 1970s. He is a lapsed Private Pilot and ex-Piper Cherokee owner. He has flown a number of light aircraft and is comfortable sitting in the co-pilot's seat or the back of any aircraft. Before moving to journalism he was a banker for 20 years. You can contact him at: terry@corporatejetinvestor.com or follow him on twitter @Terry_Spruce

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