ST Engineering unit secures 30 aircraft engines

The deal includes about $358m of fixed rate notes offered in three tranches.

Total Engine Asset Management (TEAM), the joint venture of ST Engineering’s aerospace arm, has entered into agreements for the sale of 30 aircraft engines using a securitisation structure, an announcement revealed.

The aircraft engines power primarily narrowbody aircraft leased to 13 airlines across 11 countries, with a weighted average remaining lease term of about 6 years. The structure includes about $358m (US$257m) of fixed rate notes offered in three tranches, and the placement of equity notes.

TEAM is expected to retain 10% of the equity notes, whilst an affiliate of Marubeni Corporation and one or more other investors will purchase the balance, subject to the satisfaction of customary closing and settlement conditions.

This sale will enable the group to free up capital for future investments including aircraft engines and reduce TEAM’s capital employed.