Waypoint Leasing’s $72.5m term loan
Waypoint Leasing, an Irish-based helicopter lessor, closed a five-year $72.5 million term loan last week. The deal is the company’s first term loan since it launched in 2013 and the funds will be used to refinance existing helicopters financed under Waypoint’s $385 million revolving credit facility.
The deal consists of a sole lessee rather than a diverse group of credits, which is unusual for a first term loan issued by a company that has only just celebrated its one-year anniversary. Despite the single credit exposure, the asset pool comprises three different types of helicopters on lease in multiple jurisdictions.
Ed Washecka, CEO of Waypoint, says moving this single lessor out of the revolver was financially efficient for Waypoint. “It’s a huge advantage for us given the size of the revolving facility to be able to keep the cost down by refinancing these assets with this term loan.”
A few months ago, Goldman Sachs – the only bank in the deal – approached Waypoint to raise the term loan for a sole lessee that had a lot of exposure in the revolver. The bank and lessor agreed doing the term loan was more efficient than raising a larger term loan at the time.
“One of the reasons we’re doing this term loan, and increasing the size of our revolver, is that it gives us more time to fill up the revolver before doing the next term loan,” says Washecka.
Waypoint, which raised a $355 million revolver in November has been populating the facility with assets, and recently upsized it by $30 million to $385 million.
The term loan will afford Waypoint more flexibility in populating the revolver – both in terms of credit diversity and additional time. Once the facility is saturated, the lessor will look to refinance the assets with a larger debt transaction in the near future.
“We want to reach our effective capacity, take everything out, refinance, and start again. It’s more about doing the larger transactions less frequently, than doing the smaller ones more frequently,” says Washecka.
A banker familiar with the deal says it was attractive because there has been significant yield compression in other asset classes.
The pricing was not disclosed, but according to the same banker similar deals are trading in the low 300bps mark.
Since launching the company in 2013 with an initial $375 million equity commitment from shareholders MSD Capital, Quantum Strategic Partners and Cartesian Capital Group, Waypoint has also raised $450 million of debt from over 10 lenders.
The company has a portfolio of 37 helicopters, all on lease, worth $400 million. In February, Waypoint signed a contract with Airbus for 12 EC225e and 25 EC145 T2 helicopters at Heli-Expo 2014.