Day One: Monday 2nd November
0830 Registration and morning coffee
0850 Introduction by course leader
- Anup Mysoor, Managing Director, Asia Head, Aviation Investment Banking, Citi
0900 Overview of the aircraft financing market
- Cyclicality of the aviation industry
- Lessors and airlines funding costs
- Effect of implementation of Basel III on commercial lending
- Developments in the debt capital markets
- Effect of volatility on equity financing
- Export credit back financing
- Local currency lending
- Alternative investors in the aviation industry
- Anup Mysoor, Managing Director, Asia Head, Aviation Investment Banking, Citi
- Scott Miller, Vice President, Aviation Investment Banking, Citi
0940 Commercial lending and syndication
- Direct loans
- Loan facilities
- LTV analysis
- Pricing mechanisms
- PDP finance
- Lending considerations - airlines vs. lessors
- Credit risks – airlines vs. lessors
- Nikolai Lvov, Vice President, Global Aviation -Asia Pacific, Citi
1020 ECA financing – what has changed?
- ECA financing structures
- Effect of the new ASU on aircraft lending
- Fee structures and pricing trends
- Developments in ECA debt capital market products
- Applying Cape Town discounts in ECA financing
- Harrison Moskowitz, Export Agency Finance, Asia Pacific, Citi
1100 Networking coffee break
1120 Debt capital market financing
- What are the basic DCM products?
- Functions of primary and secondary markets
- Bonds vs. loans
- Institutional liquidity and market makers
- Cristina Chang, Director and Head of Asia Pacific Securitized Products, Citi
1200 Lunch
1320 Debt capital market financing
- What are the basic DCM products?
- Functions of primary and secondary markets
- Bonds vs. loans
- Institutional liquidity and market makers
- Cristina Chang, Director and Head of Asia Pacific Securitized Products and Asia Pacific Transportation Finance, Citi
1400 Structured finance: ECA guaranteed bonds, ABS, EETC and portfolio term loans
- Why issue structured debt?
- Deal structures
- Rated vs unrated issuance
- Institutional appetite and recent trends
- Cristina Chang, Director and Head of Asia Pacific Securitized Products, Citi
1440 Equity market financing
- IPOs
- Underwriting process
- Sources of equity
- Key considerations in secondary issuance
- Convertible bonds
- Anup Mysoor, Managing Director, Asia Head, Aviation Investment Banking, Citi
- Scott Miller, Vice President, Aviation Investment Banking, Citi
1500 Asset backed lender’s perspectives on credit risk and asset risk
- Asset risks vs. credit risks
- LCCs vs. Legacy carriers
- The differing risk exposure of lessors compared to ABS lenders
- How do ABS lenders manage their risk differently?
- Key considerations in lending
- Vicente Alava Pons, Managing Director, Aviation Finance, DVB Group Merchant Bank (Asia)
1540 Networking coffee break
1600 Repossession and remarketing of aircraft
- Importance of aircraft maintenance logs and record keeping
- Jurisdiction risk in repossession of aircraft
- Developing and implementing a successful remarketing strategy
- Managing the process of aircraft redeliveries and re-registrations
- Execution risk
- Vincent H M Lam, Senior Vice President, Cabot Aviation
1640 Fundamentals of aircraft valuations
- Supply and demand for aircraft
- Methodologies for valuations
- Factors affecting aircraft values
- Interpretation of market information
- Secondary markets
- Dr. Stuart Hatcher, Head of Valuations and Risk, IBA
1720 Resurgence of PDP financing
- Lessors as PDP lenders
- The roles played by both airframe and engine manufacturers in PDP financings
- Corporate lending vs secured asset back lending
- Novation structures for PDP financing
- New structures for PDP financing
- Paul Ng, Partner, Milbank
1800 Day One summary followed by cocktail reception
Day 2: Tuesday 3rd November
0830 Registration and morning coffee
0850 Introduction by course leader: Why leasing instead of buying?
- Peter Huijbers, Head of Airlines Marketing, Hong Kong Aviation Capital
0900 Fundamentals of the leasing industry
- Industry dynamics – what’s changed?
- The aircraft leasing competitive landscape
- How to manage the cycle
- The economic life of an aircraft and residual value risk
- Strategic implications of the current market conditions
- Peter Huijbers, Head of Airlines Marketing, Hong Kong Aviation Capital
0940 Selecting the right aircraft types for your business models
- Evolving airline business models
- Development of LCCs models in Asia
- How do airlines’ business models affect the selection of aircraft?
- Lessors’ business models and addressing airline requirements
- Assessing the impact of technology and production rate on aircraft values
- How do airlines, lenders and lessors forecast and manage the RVs?
- Purchasing agreements – things to look out for
Andrew Cowen, CEO,
Hong Kong Express
1020 Risk management for lessors
- Asset, Credit and Structural risk
- Jurisdictional risk and repossession considerations
- Technical, maintenance and record issues
- Maintenance reserve cycles – full vs half
- Insurance
- Paul Dwyer, Chief Operating Officer, Hong Kong Aviation Capital
1100 Networking coffee break
1120 Technical asset management of a fleet
- Key challenges for managing a mega fleet
- MRO – what is good maintenance planning and what is not?
- How to manage a diversified pool of maintenance reserves and costs
- Technical considerations in a lease agreement
- The importance of technical records for engineering
- Oisin Murray, Head of Technical, Hong Kong Aviation Capital
1200 How do lessors engage in asset and liability management?
- Record keeping - importance of IT systems in asset and liability management
- MRO contract specification with aircraft and engine manufacturers
- Conflicting interest with airlines and OEMs in maintenance reserve management
- Portability and assignability of maintenance reserves
- Acquisition and disposal of aircraft
- Oisin Murray, Head of Technical, Hong Kong Aviation Capital
1240 Lunch
1340 How do lessors finance their fleets?
- Why there is a constant source of funding for global lessors
- How to diversify funding costs
- Lessors’ credit vs. aircraft credit – which one is more important to lenders when assessing risks
- How to utilize your capital structure to minimize funding costs
- WOON WuiJin, Senior Director, Capital Markets, HKAC
1420 MROs perspectives on redeliveries and managing lessor and lessee requirements- Market dynamic of MROs in Asia
- Conflicting interest between operators and lessors for ensuring redeliveries compliance
- How importance is the relationship of MROs with airlines and lessors
- Dispute resolutions
- Ralf Schulze, Senior Sales Executive Lessors and Banks, Lufthansa Technik AG
1500 Networking coffee break
1520 Operating platforms for lessors
Deal process
- Controls and approvals
- Technical specifications
- Negotiation and management skills
- IT systems and fleet management
- Lease management
- Nick Hardge, Head of Transaction management, Hong Kong Aviation Capital
1600 Understanding the engine as an asset class
- Value propositions for engines – how do lessors assess the residual value of engines?
- Engine leasing and engine cycles
- Effect of PMA and DER - OEM counter-activity
- Effect of new types of engines on the residual value of existing engine
- The added importance of maintenance, repair and overhaul (MRO) for engines
- Repossessing an engine and the Cape Town Convention
- Jon Sharp, President & CEO, ELFC
1700 How to Assess Credit Risk in Airlines and Operating Lessors
- Determine target market eligibility
- Identify risk of payment default associated with a relationship and/or transaction
- Justify the risk relative to the reward
Philip Ziegler, Senior Vice President, ICG Risk Management,
Citi Group1740 Day two summary followed by cocktail reception
Day 3 Wednesday 4th November
0830 Registration and morning coffee
0900 Introduction by course leader
0910 What are new lessors looking for in financing?
- What are the drivers of cash rich real estate developers and tycoons to enter the leasing?
- Pros and cons of different entry models – portfolio acquisition, JV or organic grow
- Financing considerations of cash rich new lessors
- Competitive advantages and disadvantages of new lessors
- Can new lessors transform the leasing landscape in next 5 years?
- Nicolas Parrot, Managing Director, Co-Head Trasnportation Sector, Investment Banking Asia Pacific, BNP Paribas Singapore
0950 Financial analysis and evaluation of airlines
- Access to financial information of airlines – public vs private
- Industry, business and credit risk
- Key performance and valuation metrics and indicators
- Performance of airlines
- Michael Duff, Managing Director, The Airline Analyst
1030 EETCs as standalone asset class
- What is an EETC?
- Why airlines and lessors issue EETCs
- Issues on rating
- Jurisdiction risk - Cape Town and Chapter 11
- Securities packages
- Latest developments in EETCs
- Richard Finlayson, Managing Director, Head of Asset Finance, Deutsche Bank
1110 Networking coffee break
1130 Aircraft securitization
- Value proposition of aircraft securitization
- Why lessors and airlines issue ABS
- Structural considerations within ABS transactions
- Collateral management and investor protection
- Case study
- Kevin Law , Executive Director, Securitization - Asia Pacific, BNP Parisbas
1210 Local currency issuance and MTN aircraft financing programmes
- Accessibility of local currency issuance
- MTN Programmes
- Benchmark yield Curves analysis
- International Rating Introduction
- Bond Secondary Performance
- Samson Lee, Managing Director, Head of Debt Capital Markets, BOC International
1250 Lunch
1410 Alternative sources of liquidity – JOLs and JOLCOs
- Overview of the Japanese leasing industry
- Characteristic of Japanese lessors
- JOLs and JOLCOs –how do they differ from each other?
- Equity syndication and investor base
- Types of tax investors
- Benefits of using the declining balance depreciation method
- JOLCOs - exercising the call option for purchasing aircraft
- Residual value guarantees for aircraft
- Ayasuhiro Nakauch, Vice President, Strategic Solutions Department, Mizuho Securities
1450 The use of SPVs in aircraft finance and leasing transactions
- What is an SPV?
- Why use an SPV?
- Where to incorporate the SPV?
- How to structure a deal using an SPV?
- Mark Western, Joint Managing Partner, Maples and Calder
1530 Dispute resolutions
- What is a dispute?
- Documenting dispute resolution procedures
- Choice of governing law
- Resolving disputes
- Enforcing securities
- Cape town treaties and repossession
Bill Gibson, Partner, Dentons
1610 Networking coffee break
1625 Lease accounting under IFRS
- Lease classification under accounting standards
- Accounting treatments for leases
- Updates on new accounting standard proposals
- Consolidation of subsidiaries and SPVs
- Sanel Tomlinson, Partner, Professional Practice – Accounting, KPMG
1705 Taxation for aircraft leasing
- What is the international tax regime for leasing?
- Latest developments in tax treaties
- Taxation in cross-border leasing
- Taxation in buying and selling of aircraft
- Tax relief in different jurisdictions
- John Timpany, Partner, Tax, KPMG
1745 Summary and close of school