The view from Madrid

While Iberbond 2004 is Iberia's third foray into the structured finance capital markets, the deal had a number of innovative changes, and was by far the most complicated out of the three, incorporating capital market bonds, bank loans and tax-driven leases spanning a number of jurisdictions. It...

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Bibliographic Details
Published in:Asset Finance International 2005-03, p.1
Format: Article
Language:English
Subjects:
Aircraft
Airline industry
Capital markets
Case studies
Cost control
Equipment financing
Funding
Lessors
Liquidity
Operating leases
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Summary:While Iberbond 2004 is Iberia's third foray into the structured finance capital markets, the deal had a number of innovative changes, and was by far the most complicated out of the three, incorporating capital market bonds, bank loans and tax-driven leases spanning a number of jurisdictions. It was also Iberia's biggest ever deal, with proceeds from the transaction being used to acquire up to 20 new Airbus A319, A320 and A321 aircraft, which have an appraised value of approximately $933 million. The transaction enabled Iberia to implement a number of strategic goals, such as diversification of funding source and strengthening of corporate brand in the capital markets. Iberbond 2004 has covered its fleet financing needs through February 2006 at a very competitive price level. With the cost savings provided by the tax leases, the final price to Iberia is effectively Libor plus 25, a price that compares extremely well with other similar structures in the market. Money was also saved through economies of scale in terms of documentation and spreading the arranging cost among 20 aircraft.
ISSN:1367-8086