PIMCO and GECAS to set up US$3 billion aircraft leasing fund

The portfolio will initially focus on narrow-body aircraft, and will consider assets and credit quality as well as geographic factors as part of the criteria.

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The portfolio will initially focus on narrow-body aircraft, such as the A321neo. (Source: GECAS)

With carriers scrambling to find some relief support amidst a downturn, a new investment platform could provide much-needed financing for airlines that are looking to upgrade their fleets with new aircraft. 

Fixed-income investment manager PIMCO and leading aircraft lessor GE Capital Aviation Services (GECAS) have reached a preliminary agreement to develop an aviation leasing platform to support up to US$3 billion in aircraft asset financing. 

The transaction will be subject to customary closing conditions and receipt of required regulatory approvals. 

The portfolio will initially focus on narrowbody aircraft, such as the Airbus A320 and Boeing 737, but will stay open to attractive investment opportunities in the widebody market. 

Among the investment criteria PIMCO and GECAS will consider include an airline’s assets and credit quality as well as geographic factors.  

GECAS will source transactions, act as servicer and provide asset management services for the platform. 

“As the airline industry struggles with the effects of the COVID-19 pandemic, the PIMCO-GECAS platform will inject essential liquidity into this critical industry by providing financing solutions at a time when there are fewer traditional financing options for airlines,” said Dan Ivascyn, PIMCO’s group chief investment officer.  

“Aircraft remain an attractive asset class in a critical infrastructure sector supported by solid long-term growth drivers,” he added.  

“While GECAS maintains an industry-leading position, this platform will ensure we can continue providing our airline customers with the aircraft needed to sustain their franchises, commented Greg Conlon, President & CEO of GECAS.

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