Speaker 04.04.24
04.04
ABA Aircraft Finance Subcommittee Spring Meeting 2024
Hyatt Regency Orlando
9801 International Drive
Orlando, FL 32819
Service
Contacts
Pillsbury is widely recognized as an industry leader on the forefront of innovative aircraft financing structures, including Aircraft Finance Insurance Consortium (AFIC) supported transactions.
What is AFIC?
The Aircraft Finance Insurance Consortium (AFIC) aircraft non-payment insurance (ANPI) product was developed by Marsh (in cooperation with Boeing) to provide an alternative source of funding for new aircraft purchases in the absence of readily available export credit agency (ECA) support. The structure and transaction documentation for an AFIC transaction is comparable to that of an ECA financing—in particular a U.S. Ex-Im transaction—with the ANPI policy, which is underwritten by global insurance companies, taking the place of the guarantee common in ECA transactions. A typical AFIC deal is structured as a lease financing transaction, using a bankruptcy-remote special purpose entity, with funding provided by financial institutions who rely on the ANPI policy to minimize their risk. The collateral package is similar to that found in an ECA/U.S. Ex-Im deal.
Why do I need it?
AFIC offers airlines and financiers a flexible, long-term, financing solution that can support a variety of transaction structure, jurisdictional, currency and interest rate options. Most importantly, the AFIC product allows financiers to offer financing terms that are more favorable than what would be available without ANPI cover. While still relatively new to the market, AFIC’s ANPI product is managed by a very experienced team, thus posing little execution risk.
Why use Pillsbury?
Pillsbury’s reputation as a leader in the ECA field is broad and of long-standing. We have repeatedly been voted Export Credit Agency Law Firm of the Year and Best Trade Finance Law firm in North America by Trade Finance magazine. Our team’s solid expertise with ECA financings has paved the way for us to become front-runners in the AFIC field.
We have experience representing multiple airline clients in AFIC financings, involving assets with a value in excess of U.S. $1 billion. We are deeply familiar with the intricacies of the AFIC product, having worked across a variety of structures and deal teams. Our work on these transactions has already been recognized—our team was an integral part of transactions that garnered Deal of the Year awards from numerous industry publications.