Banks are certainly lending in business jets today, more than they were in 2008, or even two or three years ago. “Of course, we want to lend to a strong and growing company, which is well managed,” Amalfitano said. “But we also see the aircraft as an asset: is it equipped with modern technology, including upgraded avionics? Does it have manufacturer guarantees, maintenance programs and good insurance? How is it used, managed? And how deep is the resale market? The form of safety by spare engines is generally the same as that of an aircraft, which is discussed in questions 15 to 20. If no replacement engine is installed, a safety agreement may be used for aircraft that cover this engine or any other uninstalled engine. Engines are generally treated separately from the aircraft, so an aircraft safety agreement comprising both an aircraft and its installed engines should separately identify the engines by manufacturer, model and serial number. Subject to the provisions of the Aircraft Safety Agreement, the Aircraft Safety Agreement should maintain the load on the engine when it is removed from the aircraft. An engine that was subject to a safety agreement on another aircraft continues to be subject to the UCC, but government laws in the jurisdiction in which the engine was installed at the time of installation may indicate something else. If the aircraft financing market is now more fragmented and different types of credit are available based on credit quality, how do lenders determine your creditworthiness? Prior to the recession, it was generally accepted that business aircraft would lose 4 to 6 per cent of their value each year. For new aircraft are still five years old today, Amalfitano reports that lenders take a depreciation rate of 6 to 8 percent.
For aircraft over 10 years of age, lenders could accept an annual depreciation rate of more than 10 per cent, but this is not an easy function of the aircraft`s age. What is the safety structure for aircraft and leases? What are the consequences of changes to security or its beneficiaries? The typical form of a safety document over an aircraft is usually referred to as a safety agreement, mortgage or trust agreement. Although there is no specific form, these agreements must be signed (or certified) by the parties to the agreement, contain a description of the guarantees and specify that a security interest is being considered. As a general rule, agreements generate interest in the airframe or engine. Agreements are not required to indicate a guaranteed ceiling and the economic conditions of the agreement should not be recorded. In particular, a creditor becomes an insured party only when the interest of security is “attached”. In accordance with Article 9 of the UCC, security interest is generally not added unless the funder receives value for the guarantees, the donor has security rights (or the power to transfer the guarantees to a secure party) and the donor signs the security agreement. “Banks are certainly lending in business jets today, more than they were in 2008 or even two or three years ago,” said Ford von Weise, director and director of global aircraft finance at Citi Private Bank.
“We`re seeing increased competition in space. Lenders who have never been into aviation financing are entering the market. If a lender grants an interest rate on a security to insure a loan and the lender transfers the loan to a new lender, the guarantee contract under which the guarantee was granted should be awarded to the new lender. The stockbroker`s interest in securities must receive a notice of assignment. There is no reporting or registration requirement for the effectiveness of an assignment between the first lender, the original lender and the new lender.
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