EY’s Post

Transcript

Hey, folks, we're going to spend the next few minutes having a conversation, around what we're seeing in the aviation space in particular ABS and also in the investor space, I'm joined by my colleague Niamh Tobin. Niamh, you're talking to clients the whole time. What are you hearing and seeing around the market in the ABS space? Thanks Alan. I think over the last number of weeks and months, we've seen a real uptick in the number of issuances of aviation ABS deals, which I think has been absolutely fantastic. It's really kind of pent up demand there, driven by how long that market was actually closed and the number of issuers who were waiting for that to reopen. Of course, that was facilitated by the number of warehouses that were recycled. And of course, the banks played a key role there. I think from a lessor perspective, what's really important for those early issuers was how available they were and ready to go at the right time. The market was right. I think what's key driver behind that is having the right portfolio selected and ready to securitize. Which was key in terms of the pricing and making sure that that was, competitive and, attractive for them as well. I think what's important as well is from the series A and B notes, you know, there's been a real investor appetite there. You're seeing some new players in the space as well, which I think is great. The E-note hasn't quite returned yet, but I think all of the signals are there. It's really, really positive. And, I just think it's great for the space and there's a lot of it's a lot of energy and there's a lot of excitement about that space again, which is a fantastic. And then I suppose I think outside of the ABS space in terms of the investor space, what do you see in yourself? The investor space has predominantly been characterized by private equity investors. I think they have been and continue to be the lifeblood of the aviation finance sector. They remain interested in the space and have a real appetite. That's across the spectrum, whether that be engine leasing platforms, whether that be mainstream narrowbody platforms or regional aircraft as well. The backdrop, though, for the activity, is pretty anchored into the mega mergers that happened in recent years. The other larger lessors started to bridge that gap and scale that are doing that through portfolio acquisitions and looking at M&A opportunities. That relative scale is really important because it informs are two aspects for the business and the longer term. One is their bargaining power with OEMs and other parties. And secondly, that the overall cost of funds, which is key in this industry taking your perspective, bringing my own views in the market, I think it's really intriguing to think what's going to play out in the next 12, 18 months. We'll be seeing new participants. We see the same names reappearing again. It's a lot of activity, a lot of interest. I think it's going to be fascinating to see what happens. Absolutely. Really exciting times ahead.