Nippon Export and Investment Insurance (NEXI), the official export credit agency of Japan, has supported a three-year loan to aircraft leasing company Aviation Capital Group (ACG).
The US$500 million unsecured loan was signed with Mizuho Bank just before Christmas, and was announced by Newport Beach, California-based ACG on January 4. NEXI provided an Overseas Untied Loan Insurance policy.
ACG is a wholly owned subsidiary of Tokyo Century Corporation, which helped arrange, lead, and support the transaction.
“This transaction is another significant milestone for ACG as we continue to diversify our funding sources,” comments Madhu Vijay, executive vice president and chief financial officer of ACG. “We are very appreciative of Mizuho’s continued support of ACG and Tokyo Century, and grateful to our parent, Tokyo Century, for their key role in identifying and arranging NEXI support for this transaction.”
ACG was founded in 1989, and as of September 30 2020 had around 450 owned, managed and committed aircraft, leased to approximately 85 airlines in approximately 40 countries.
In 2017, Tokyo Century acquired a 20% stake in ACG, and later increased this to 24.5%. In September 2019 ACG agreed to become a wholly owned subsidiary.
During the extremely difficult operating environment in 2020, as the Covid-19 pandemic shut down large parts of the global aviation industry, ACG was able to rely on its strong parent company for funding.
In June 2020 ACG announced the closing of a US$600 million unsecured revolving line of credit with Tokyo Century. The facility had an initial term of three years, and will automatically extend for additional one-year periods with mutual consent.
In September 2020 ACG announced the closing of a US$450 million unsecured term loan from Tokyo Century, with the support of the Japan Bank for International Cooperation (JBIC) and other Japanese financial institutions. Tokyo Century borrowed the money on behalf of ACG, and lent the proceeds to ACG via an intercompany loan.