KBRA Assigns Preliminary Ratings to PKAIR 2025-2 Aviation Loan ABS Securitization

Strategic Insights -

PK AirFinance, a leading aviation finance company, has completed its fifth securitization transaction, PKAIR 2025-2, with the help of Apollo PK Air Management (CLO) LP. The transaction involves the issuance of Class A-F Notes, Class A Notes, Class B Notes, and Class C Notes, totaling approximately $874.9 million, with a weighted average remaining loan term of 5.4 years and a weighted average seasoning of 26.4 months. The loan portfolio consists of 107 loans, secured by 35 aircraft and engines operated by 80 airlines in over 45 countries.

Key Takeaways:

  • KBRA has assigned preliminary ratings to the Class A-F Notes, Class A Notes, Class B Notes, and Class C Notes issued by PK AIR 2025-2, an aviation ABS transaction.
  • PK AirFinance has originated over $40 billion across 3,000 aviation loans since inception and has a managed portfolio of approximately $3.5 billion secured by 275 aircraft and engines.
  • The loan portfolio comprises 107 loans with an average balance of $12.7 million and a weighted average term of 5.4 years.
  • The portfolio has a weighted average seasoning of 26.4 months and is secured by 35 aircraft and engines operated by 80 airlines in over 45 countries.
  • PK AirFinance will retain 100% of the equity of the subject transaction at closing.
  • Proceeds from the Notes will be used to acquire a portfolio of 35 loan facilities with a limited recourse of 78.8% and full recourse of 21.2% by loan balance.

Statistics:

  • Total loan balance of the Portfolio: $874.9 million
  • Average Collateral Obligation balance: $12.7 million
  • Weighted average remaining loan term: 5.4 years
  • Weighted average seasoning: 26.4 months
  • Total number of loans in the Portfolio: 107
  • Number of airlines operating the secured aircraft and engines: 80
  • Countries where the secured aircraft and engines are operated: 45
  • Total amount originated by PK AirFinance: $40 billion
  • Managed portfolio of PK AirFinance: $3.5 billion
  • Number of aircraft and engines secured by the Portfolio: 275

Sources:

  • KROLL BOND RATING AGENCY, LLC news release
  • PK AirFinance website
  • Apollo PK Air Management (CLO) LP website