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GUG-2009-11 KAL 777-300ER
GUG-2016-10 - Altavair - A.jpg
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Formed in 2003 as Guggenheim Aviation, a jet airplane investment firm and leasing company which was based in Chicago. In October 2016, Guggenheim Partners was sold to Altavair, a management team based in Issaquah, a town located 20 miles east of Seattle, Washington State.
Issaquah, Washington, USA
Guggenheim Aviation's former Address:
227 West Monroe Suite 4000
Chicago, Illinois IL 60606, USA
April 2003: Guggenheim Aviation Partners (GUG) were stewards of the wealth of the Guggenheim family and other families and institutions, and managed $240 billion in assets.
(GUG) was founded in 2003 by Stephen Rimmer and Paul Newrick, both British-born aircraft-industry veterans, as a joint venture with Guggenheim. In the ensuing years, the aircraft leasing business has been an attractive and lucrative field.
Guggenheim Aviation Partners, LLC (GUG) targeted transactions in special types of used commercial airplanes and sought returns from current income and residual value. It benefited from downside protection by purchasing assets at or near the bottom of the industry cycle. (GUG)'s principals averaged 21 years in the aviation industry. They had expertise in disciplines specific to effective risk management of aviation assets, including used commercial airplanes, commercial airplane engines, and certain debt instruments secured by aviation assets. The group managed approximately $278 million of equity, of which approximately $220 million was invested in over >40 airplanes with an aggregate value in excess of $1 billion.
(GUG) acquired assets at discounts to base values, leased airplanes or engines to airlines both domestically and internationally, and then sold those assets on an opportunistic basis. About half of (GUG)'s activities focused on the purchase and conversion of passenger airplanes into medium- and long-haul freighters (a market that at the time was under-served and was expected to benefit from near-term industry trends.
Through its hands-on approach, (GUG) charted the life cycle of each potential acquisition, negotiated the placement, conversion, and divestiture of each asset years in advance, and actively managed the process throughout.
(GUG) pursued 3 primary strategies:
• Purchase, conversion, and lease
• Purchase and lease
• Purchase and tear-down
In the conversion scenario, (GUG) attempted to exploit an arbitrage opportunity between the asset prices of passenger jets and the leasing terms and increasing global demand for freighters of equivalent models. In a purchase and lease, (GUG) sought to purchase on advantageous terms, planes or engines that either had an attractive lease already in place or that could be leased readily to known counter parties. The tear-down scenario offered an opportunistic or “quick flip” result, downside protection or a terminal out-year exit with flexible timing.
May 2005: 2 747-433F's (24998; 25075), ex-Air Canada (ACN) to be leased to China Cargo Airlines (CKK) in 11/06 after conversion to freighter by Bedek Israeli Aircraft Industries (IAI).
July 2005: $1.37 Billion, 6 orders (11/06) 747-400ERF freighters. Guggenheim currently owned 11 747-400's, 8 of which were leased to operators, and 3 were in a conversion program from passenger to freighters.
August 2005: 4 747-412SF's (24061, PH-; 24066, PH-; 24266, PH-; 24975, PH-), leased to Martinair (MTH).
October 2005: Guggenheim Aviation Partners (GUG) ordered 2 747-400SF Boeing Converted Freighters (formerly known as Special Freighters) for delivery in 2008. The airplanes were Combi-to-freighter conversions. Boeing's Commercial Aviation Services unit managed the process.
November 2005: 2 747-400ERF's leased to (TNT) Airways (TNB).
March 2006: Based on an "Airline Business" magazine survey of airplane leasing companies, Guggenheim Aviation (GUG) had a fleet of 11 airplanes valued at $345 million and was ranked 32nd of the top 50 airplane leasing companies (see attached data).
June 2006: Israel Aircraft Industries said its Bedek Aviation division received an (FAA) Supplemental Type Certificate (STC) for conversion of a 747-400 Combi into a pure freighter. The airplane used for the certification process was owned by Guggenheim Aviation (GUG) and was to be operated by Air China (BEJ). (IAI) said certification also was received from the Israeli (CAA) and certification from (EASA) and (CAAC).
747-433 (24988) leased to Air China Cargo (CAO)
October 2006: $1.12 billion, 4/2 orders (2/09) 747-8F freighters.
Guggenheim Aviation (GUG) owned a fleet of 30 Boeing jet airplanes.
747-433 (25075) leased to Air China Cargo (CAO).
November 2006: 2 747-4HAERFs (35232, OO-THA; 35234, OO-THB), wet-leased to (TNT) Airways (TNB).
December 2006: $700 million (actually just >$400 million according to airplane valuation firm Avitas), 3/1 orders 777-300ERF freighters.
January 2007: Guggenheim Aviation Partners (GUG) became the 3rd customer for the A330-200F, finalizing an October letter of intent (LOI) for 6 on behalf of one of its investment funds. Deliveries were expected to begin in early 2010. "Guggenheim Aviation Partners (GUG) made a significant investment in the acquisition of medium-range and long-haul freighters, as it was believed that it was a market that was currently under served and was expected to benefit from near-term industry growth," Managing Director Paul Newrick said.
Aircastle (CSL) signed a $1.6 billion purchase agreement with "certain subsidiaries" of Guggenheim Aviation (GUG) Investment Fund to acquire 26 passenger airplanes and 12 freighters. The passenger airplanes were unidentified, while the freighter purchase comprised 4 new 747-400ERFs, 7 747-400 conversions and 1 MD-11SF. The airplanes were purchased in a series of closings scheduled to February 2009, with 28 scheduled to close that year. "This was a transformational investment for Aircastle (CSL)," (CEO) Ron Wainshal said. "This acquisition significantly increased the asset base of their company, and established a meaningful presence in the cargo sector."
JetWorks Leasing announced the sale of a 767-300ER on lease to (LAN) Airlines by (BTMU) Capital and (HSH) Nordbank to a fund managed by Guggenheim Aviation Partners (GUG), and a 737-300 on lease to Pluna (PLU) by (PLM) Financial Services to Deutsche Bank Equipment Leasing.
April 2007: Rolls-Royce (RRC) said Guggenheim Aviation Partners (GUG) selected the (Trent 700) to power up to 6 A330-200Fs in a deal worth approximately $200 million at list prices. Deliveries began in 2010. It was Rolls (RRC)'s 1st order for the airplane type.
July 2007: 747-4HAERF (1389-35235, OO-THC), leased to (TNT) (TNB), who wet-leased it to Emirates Skycargo (EMC).
October 2007: Guggenheim Aviation (GUG) Partner Fund II exercised options for 3 777F freighters. The order was valued at approximately $750 million and brought (GUG)'s freighter commitment to 6 777s and 4 747-8s. Other Guggenheim-managed funds ordered 6 747-400ERFs and 7 747-400BCFs.
April 2008: 747-4HAERF (35237, VP-BIM), leased to Volga-Dnepr (VDA), wet-leased to AirBridge Cargo (ABC).
January 2010: ST Aerospace was selected by Guggenheim Aviation Partners (GUG) to perform a passenger-to-combi conversion on a 757-200 for (TNT) Airways (TNB). It was (ST) Aerospace's 1st 757-200 combi conversion performed for a commercial customer. The airplane was expected to be inducted by the end of February, and was targeted for re-delivery by the end of 2011.
(GUG) confirmed that it canceled orders for 2 747-8Fs. It still had 2 on order.
January 2011: 777-FHT (38969, OO-TSA) freighter was to be leased to Gestair Cargo (REI), and wet-leased to (TNT) Airways (TNB).
November 2012: Boeing (TBC) was selected by Guggenheim Aviation Partners (GUG) to manage and engineer the conversion of 3 767-300ERs to freighters, for delivery in 2013. The conversion took place at (ST) Aerospace subsidiary, (ST) Aviation Services Company in Paya Lebar, Singapore.
1 A330-243 (TRENT 772B-60) (261, 9M-AZL), ex-(G-SMAN) Guggenheim leased to FlyNas (NAZ).
October 2016: News Item A-1: New York City-based investment giant Guggenheim Partners announced on October 3rd the sale of its commercial airplane leasing unit Guggenheim Aviation Partners to Altavair see attached:
"GUG-2016-10 - Altavair A/B.jpg."
The aviation leasing company name changed from Guggenheim Aviation Partners to Altavair. Altavair's management team will now be based in Issaquah a town about 20 miles east of Seattle, Washington.
Altavair (GUG) employs 18 people at its Issaquah headquarters and 9 more at offices in London and Singapore.
The newly independent lessor will manage a $3.4 billion portfolio of 55 commercial airplanes, including 30 wide body jets. Altavair's fleet consists of 9 Boeing 737-900ERs, 2 747s, 16 757s, 3 767s, 14 777-300ERs, 2 777Fs, 8 A330-200s, and 1 A330-200F. Most of these jets are managed, not owned by the company.
Steve Rimmer, the aviation executive who led Guggenheim Aviation Partners will remain as the Chief Executive Officer (CEO) of Altavair.
He said that Altavair plans to raise capital from the debt market, chiefly from insurance companies and pension funds, to grow the portfolio by about $1 billion per year and own rather than manage more of its fleet.
Steve said the market has matured, lately accounting for nearly 42% of the total commercial jet fleet worldwide. Its dynamics no longer suit the fixed 7 to 9 year investment fund that was Guggenheim's
framework. He said it takes longer to get full value from the investment needed to place, say, a 777-300ER with American Airlines (AAL) on a 12 year lease.
Yet even as Guggenheim sold off its unit, Chairman Scott Minerd said its clients may still invest in specific Altavair airplane deals.
The airplane leasing market has been changing dramatically in recent years, and the current lull in commercial jet orders has led to softening lease rates.
Guggenheim's sale continues a recent trend of large USA financial institutions divesting such assets. A prominent example of this is (CIT), a New York based financial holding company with >$65 billion in financing and leasing assets, being close to finalizing the sale of its airplane leasing unit (CIT) Aerospace.
China's (HNA) Group, owner of Hainan Airlines, is expected to pay about $10 billion for the (CIT) unit, which manages a fleet of >350 commercial jet airplanes. (HNA) bought Avolon (AZV) (another commercial airplane lessor) for $7.6 billion earlier this year.
Chinese companies have been eager buyers of airplane leasing assets. Avolon (AZV)'s (CEO) Domhnal Slattery told Flight Global magazine this year that by 2025, 3 of the top 5 lessors could be Chinese.
News Item A-2: "Avolon to Acquire (CIT) Group’s Leasing Business" by
(ATW) Victoria Moores Victoria.firstname.lastname@example.org, October 6, 2016.
Irish lessor Avolon (AZV) has agreed to acquire USA company the (CIT) Group (TLS)’s leasing business for $10 billion, creating the world’s 3rd largest lessor with a fleet of 910 airplanes worth >$43 billion.
Announcing the agreement October 6, (AZV) detailed plans to acquire the (CIT) Group’s leasing business, which includes 334 owned and managed airplanes, plus a further +133 airplanes on order or committed.
“(AZV) will acquire total assets of $11.1 billion as of June 30, 2016 and associated liabilities. (AZV) will pay $10 billion, a premium of 6.7% to the June 30th 2016 net asset value (NAV) of $9.4 billion. The purchase price is subject to adjustment for changes in (NAV) between 30 June 2016 and the closing date of the transaction,” (AZV) said.
Together, the 2 lessors have an in-service fleet of 561 airplanes, plus orders and commitments for a further +349. This figure includes 282 “new technology” airplanes, comprising 195 from Airbus (A320neo family, A330neo and A350), 59 Boeing 737 MAXs, and 28 787s.
The acquisition will expand Avolon (AZV)’s customer base by 69 airlines in 20 countries, taking the leasing giant to a total of 154 customers in 61 countries.
(AZV) said the fleet will be spread in 3rds across the Americas, (EMEA) and Asia-Pacific regions, providing balanced geographic exposure. This will “drive growth and balanced, risk adjusted returns,” the lessor said.
Since launching in 2010, Avolon (AZV) has undergone a rapid expansion. The deal will quadruple (AZV)’s size, compared with 10 months ago when it was acquired by the (HNA) Group’s Bohai Leasing.
The (HNA) Group outlined its ambition move from 4th to 3rd place among global lessors by asset value in June, and had hinted that (CIT) Aerospace could be a potential acquisition target.
Avolon (AZV) is now aiming to become the global number one in aircraft leasing, taking the top spot from Netherlands-based AerCap (DEA). “From a standing start, we will have built (AZV) into a leading global player in 6 years,” (AZV) (CEO) Dómhnal Slattery said. “While this transaction is strategically compelling and will double the scale of (AZV), it is not the summit of our ambition.”
The deal, which remains subject to Bohai shareholder and regulatory approvals, is expected to close in the 1st quarter of 2017.
Click below for photos:
9 737-900ER (CFM56-7B).
4 747-4HAERF (1220-35232, OO-THA; 35234, OO-THB, 2006-11; 1389-35235, OO-THC, 2007-07; 1402-35237), 35234; & 35235 LST (TNB). 35235 (TNB) WET-LST (EMC) 2007-07. 35237; LEASED TO (VDA), WET-LEASED TO (ABC) 2008-04 AS (VP-BIM). FREIGHTER.
1 747-406ERF (1382-35233, F-GIUF), EX-(KLM), LEASED TO (AFA) 2007-01. FREIGHTER.
4 747-400ERF, FOR AIRCASTLE (CSL).
2 747-400CF, CONVERTED TO CF BY BOEING COMMERCIAL AVIATION SERVICES.
2 747-400F, CONVERTED TO F BY (IAI) & LEASED TO OPERATORS.
7 747-400F, CONVERTED TO F FOR AIRCASTLE (CSL).
4 747-412SF (717-24061, PH-; 791-24066, PH-; 809-24266, PH-; 838-24975, PH-), LEASED TO (MTH) 2005-08. 24975 LST (AIN) 2005-09 - 2006-10, THEN TO (MTH). FREIGHTER.
2 747-433F (PW4056) (840-24998, /91; 868-25075, /91; EX-(ACN), LEASED TO (CKK) 2005-05), CONVERTED TO F BY (IAI). 24988; LEASED TO (CAO) 2006-06; 25075; LEASED TO (CAO) 2006-10. FREIGHTER.
2 747-8F (2011-02). FREIGHTER.
1 757-230 (PW2040) (275-24747, /90 SP-FVK), EX-(DUT)/(CDF), LEASED TO (FIH) FOR FISCHER AIR POLAND OPERATIONS 2005-12. LEASED TO (ITZ) 2006-03. 220Y.
1 767-300ER, EX-(LAN) 2007-03.
2 767-300ER TO BE CONVERTED TO F BY BOEING.
2 777-300ERF. FREIGHTER.
1 777-3B5ER (823-37136, HL7784), LEASED TO (KAL) 2009-10.
0 MD-11F LST (MTH). FREIGHTER.
0 MD-11SF TO AIRCASTLE (CSL).
7 A330-200F (TRENT 772B-60). FREIGHTER.
1 A330-243 (TRENT 772B-60) (261, 9M-AZL), EX-(G-SMAN) GUGGENHEIM LEASED TO FLYNAZ (NAZ) 2015-11.
1 A330-200F (TRENT 700) (2010-02). FREIGHTER.
Click below for photos:
GUG-1-Steve Rimmer - 2016-10.jpg
STEVE RIMMER, CHIEF EXECUTIVE OFFICER (CEO) ALTAVAIR 2016-10.
Steve was formerly (CEO) of Guggenheim Aviation Partners.
GUGGENHEIM AVIATION, FORMED IN 2003 AND SOLD OCTOBER 2016 TO ALVATAIR:
SCOTT MINERD, CHAIRMAN.
DOMINIC CURCIO, MANAGING PARTNER.
PAUL NEWRICK, MANAGING DIRECTOR.
STEPHEN RIMMER, CHIEF EXECUTIVE OFFICER (CEO).
BRIAN SIR, (COO) (email@example.com).
STEPHEN BARNES, HEAD SINGAPORE REPRESENTATIVE OFFICE, EX-BARCLAYS BANK, (2008-10).