Reposted from 1.21.21 Bloomberg article:

“Castlelake LP, an investment firm whose businesses include buying and leasing out commercial planes, sold $595 million of bonds backed by aircraft on Wednesday, reaching money managers that are hopeful the pandemic-battered industry is nearing a recovery, and are hungrier for yield. More aircraft lease deals could be coming in part because airlines have raised so much money, giving them resources to make lease payments.”

The biggest portion of the Castlelake deal priced with a yield of 3.5%, a high level relative to other asset-backed securities for sale now. For example, a separate bond, with a slightly lower rating and a 3.4 year average life and backed by subprime car loans, yielded just 1.16% this week.

“The yield on the Castlelake transaction was high enough to draw ten times as many orders as there were bonds for sale, according to Jason Callan, head of structured assets at Columbia Threadneedle Investments.”

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