Two High Fliers United in an Aircraft Fund: An A380 for Singapore AirlinesBy Lloyd Fonds Ag, PRNE
Tuesday, August 9, 2011
HAMBURG, Germany, August 10, 2011 -
- Lloyd Fonds A380 Singapore Airlines Entering the Subscription Phase
- Fixed Income From a Ten-year Lease Plus a Renewal Option of Up to a Further Five Years
- Risk-minimized Calculation: Loan to be Repaid in Only 12 Years
- Forecast Payouts Rising From 7.2 to 14 Percent p.a. / Total Flowback of Around 210 Percent
With its new Lloyd Fonds A380 Singapore Airlines closed-end investment fund, the Hamburg-based fund arranger is combining two high fliers of the aviation industry in a single top-class investment - the A380 and internationally renowned Singapore Airlines.
Subscribers will be investing in a brand-new A380, the flagship of the Airbus fleet and the world’s largest and most efficient passenger aircraft.
The fund is characterized by very stable revenue inflows as the aircraft is being leased to Singapore Airlines for a minimum fixed period of ten years plus a renewal option of up to a further five years.
“We are thrilled to be able to unite two high fliers of the aviation industry in the form of Airbus and Singapore Airlines in our new aircraft fund,” says Michael F. Seidel, CFO/CSO at Lloyd Fonds AG. “The fund is impressive not only on account of the asset in which it is investing and the lessee but also thanks to its risk-minimized structure,” he adds.
Singapore Airlines - top-rating lessee
Lloyd Fonds has been able to gain in Singapore Airlines one of the world’s most successful airlines as the lessee. Its majority shareholder is the state-owned Temasek Holdings, which is rated AAA by Standard & Poor’s and Moody’s. Singapore Airlines has an outstanding equity ratio, relatively low leverage and copious liquidity.
The airline has been able to benefit consistently from the sustained growth trend in the air travel industry, with global passenger numbers growing by 45 percent between 2000 and 2010. Long-term average growth of 6 percent per year is forecast in air passenger numbers.
The A380 - a giant with great potential
The A380 is not only the world’s largest aircraft but also one of the most efficient and quietest currently in service. With a capacity of a total of 409 passengers, it is also the first Singapore Airlines aircraft to feature the new seat arrangement in which the entire upper deck is fitted with business class seating.
Risk-minimized fund structure
The lease signed with Singapore Airlines has a minimum term of 10 years. As it is an operating lease, Singapore Airlines bears all operating and maintenance costs, meaning that the fund subscribers are not exposed to any operating cost risk. In addition, at USD 185 million, the purchase price of the aircraft is below the figure calculated by three independent experts, markedly so in some cases. As the A380 is already flying for Singapore Airlines, there is no delivery or acceptance risk as the fund has also already accepted delivery of the aircraft. In addition, the entire funding for the investment has been secured, with the loan expected to be repaid in full within twelve years.
The fund at a glance
The investment capital of Lloyd Fonds A380 Singapore Airlines stands at USD 204.7 million including the five percent front-end load, while the equity component equals USD 87.7 million. The minimum subscription amount equals USD 15,000; the fund has a planned duration of 15 years. Forecast payouts start at an initial 7.2 percent p.a., rising to 14 percent p.a. The total forecast flowback stands at around 210.1 percent before tax.
About Lloyd Fonds AG:
Lloyd Fonds AG is one of the top arrangers of closed-end investment funds in Germany. Over its history, which now spans more than 15 years, the Hamburg-based company has initiated 105 funds with an investment volume of around EUR 4.7 billion. The current secondary-market fund “Best of Shipping III” received the 2011 Feri EuroRating Award in March of this year. Research company FondsMedia has awarded Lloyd Fonds the 2010 Seal of Sustainability. Lloyd Fonds specializes in tangible asset investments in the transport, real estate and energy segments. To date, over 52,000 subscribers have placed equity of just under two billion Euros in investment funds arranged by Lloyd Fonds AG. Lloyd Treuhand GmbH is responsible for subscriber relations. Lloyd Fonds has been listed on the Frankfurt stock exchange since 2005 (WKN 617487, ISIN code DE0006174873).
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Carolin von Below
Tel: +49(0)40-32-56-78-127. Fax: +49(0)40-32-56-78-99.
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Tags: August 10, Germany, Hamburg, Lloyd Fonds Ag