This represents the latest move by banks into aircraft finance which offers better returns than straight corporate loans.
Reuters reported that MUFJ Financial Group will buy the aviation financing arm of Germany’s DZ bank. Together with BOT Lease, MUFG agreed to take on the entire aviation finance portfolio of DZ Bank’s DVB which was valued at $6.4b (EUR5.6b) as of June 2018.
DZ Bank decided to sell individual tranches of its troubled transport financing division after failing to find a buyer for the business as a whole.
Sources said that MUFG is buying the portfolio for a price slightly above face value of the $6.03b (5.3b) in drawn loans. Moreover, sources revealed that the transaction will include an aviation finance management platform.
MUFG worked with the Bank of America and Linklaters to seal the deal, whilst Goldman Sachs and Freshfields acted as sellside advisers.
Here’s more from Reuters.
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