Turkish Airlines recently announced the closing of the delivery of one Airbus 350-900 aircraft, with Natixis CIB acting as the lead arranger and debt underwriter. Deniz Billion, Executive Director of Aviation Finance for EMEA, looks back on this operation for the Turkish Airlines and shares her insights on its JOLCO structuring.
This complex structure optimizes the overall cost of borrowing for Turkish Airlines while achieving a 100% financing solution.
Deniz Billion
Executive Director of Aviation Finance for EMEA
What makes this financing important for Turkish Airlines?
This transaction supports the fleet growth strategy of Turkish Airlines who aims at doubling its fleet to reach 800 aircraft in the coming decade
By rejuvenating their fleet with new generation fuel efficient aircraft, the airline also aims to reduce its carbon footprint per miles flown, an important axis for us, as founding member of IMPACT-on-sustainable-aviation.
Turkish Airlines is a prestigious client for Natixis’ Aviation franchise, thanks to a strong relationship developed over the years. We take great pride in supporting the airline on its journey of expansion.
We are pleased to stand alongside Turkish Airlines, a valued client with whom we have built a long-lasting relationship of trust, as they embark on this new phase of expansion. Natixis CIB is committed to support Turkish Airlines, an airline that understands that growth and sustainability can thrive together.
Jean Chedeville
Global Head of Aviation
What are the advantages of this mixed structuring for all stakeholders?
The aircraft financing is structured as a JOLCO (Japanese Operating Lease with Call Option) with a senior debt wrapped by the Balthazar insurance product (created by Airbus and Marsh to support Airbus deliveries and backed by a consortium of leading insurers).
The JOLCO structure leverages the appetite from the Japanese investors for the aviation sector, while the Balthazar insurance provides a credit enhancer to the senior lenders. This complex structure optimizes the overall cost of borrowing for Turkish Airlines while achieving a 100% financing solution.
Being the launching customer of Balthazar insurance guaranteed aircraft financing product back in 2019, Turkish Airlines now combines the JOLCO scheme which is used extensively in the last two decades, with a Balthazar insurance supported debt and we are proud of arranging this first for the airline.
What was your role in the transaction?
Natixis CIB acted as the lead arranger and debt underwriter for this transaction. Our primary responsibility was to ensure the smooth integration of the financing and equity components, as well as to underwrite the JPY denominated senior debt.
We have extensive experience arranging JOL/ JOLCO structures for major airlines and combining them with a large range of financial products.
To enhance our ability to offer more of such be spoke Japanese linked solutions to our clients, we opened a new branch in Tokyo in 2023.
