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Irish Stock Exchange to launch dedicated exchange for aviation finance Back
The Irish Stock Exchange (ISE) has announced plans to create a dedicated exchange for aviation-related debt and other instruments that seeks to complement Ireland's position as a leading jurisdiction for aircraft leasing.
The exchange aims to offer a highly efficient, low-cost platform delivering better visibility, greater investor reach and improved market intelligence. 26 specialist debt instruments with a total value of $12.7 billion are currently listed on ISE markets by issuers from the aviation industry including a $927m EETC (enhanced equipment trust certificate) from International Airlines Group (the parent of BA and Iberia); bonds totalling in excess of $1bn associated with Emirates Airlines; a $636m Asset-Backed Security from Avolon.

The dedicated platform aims to be an international hub for aviation finance assets creating a market that will be enhanced by specialist knowledge of the industry in Irish-based leasing, broking and corporate finance firms.

'Ireland is a world leader in aviation finance and the Irish Stock Exchange is a world leader in debt listings. We want to combine these skills to make Ireland even more attractive for aviation issuers and investors. We are creating a dedicated platform specialising in aviation-related debt instruments that will provide issuers and investors with what they are looking for - visibility and specialist knowledge of their sector,' said Deirdre Somers, chief executive, Irish Stock Exchange.
(R-L) Joe Gill, chairman of Enterprise Ireland's Aviation Forum, director of corporate broking with Goodbody Stockbrokers and contributing editor of Aviation Finance; Kostya Zolotusky, managing director, capital markets development and leasing of Boeing Capital Corporation and Deirdre Somers, chief executive of the Irish Stock Exchange, at the announcement of the new initiative, on January 20th.

“Ireland is home to more than 30 companies engaged in this high-value, high-skilled sector. It is also home to two of Europe’s best-known airlines in Ryanair and Aer Lingus. Investors and issuers around the world are familiar with Ireland’s expertise in aviation and it makes sense to build on that,” she said.

The ISE has worked closely with Enterprise Ireland’s Aviation Forum as well as stockbroking firms and aircraft leasing companies to advance plans for a dedicated exchange, and the initiative has been welcomed within the global aviation industry.

'Ireland’s unique position at the epicentre of global aircraft leasing is well recognized,' said Kostya Zolotusky, Managing Director, Capital Markets Development and Leasing at Boeing Capital Corporation. 'We congratulate Ireland on recognizing that and we look forward to continued evolution and innovation in how aircraft-securities are packaged,' he said.

Boeing expects the public capital markets where aircraft-backed financial instruments are traded to provide a fifth of the world’s delivery financing in 2014. Boeing also expects new structured financial instruments will be developed to meet the needs of leasing firms and others.

'With over $110bn of aircraft assets being delivered annually worldwide, the need for innovative funding by capital markets will only grow in line with an expanding aircraft leasing sector,' said Joe Gill, Chairman of Enterprise Ireland’s Aviation Forum, Director of Corporate Broking with Goodbody Stockbrokers and Consultant Editor with Aviation Finance. 'Ireland can provide a valuable platform to connect retail and institutional investors with key aviation companies in this key financial services sector and Goodbody is committing resources in support of that ambition. The ISE is a flexible, efficient and competitive platform that can be used by issuers and investors alike to further develop this key transport infrastructure globally,' he said.

Writing in the December issue of Finance Dublin he set out some of the advantages such an initiative might bring.

'The IAA is keen to support growth in all aspects of the Irish air transport industry and to facilitate innovative developments such as this. It’s estimated that the demand for new aircraft over the next 20 years will be in the region of US$3.5 trillion to fund nearly 30,000 new aircraft worldwide. Ireland has a great opportunity to play a part in this market,' said Eamonn Brennan, Chief Executive, Irish Aviation Authority. 'Ireland is a global leader in air finance and leasing and the innovative development of an Aviation Exchange will help to keep the country at the competitive forefront of this fast-growing industry. As part of this, there is huge potential for the Irish Civil Aircraft Register, including foreign leased aircraft, supported by the IAA’s effective and cost efficient safety regulatory oversight,' he said.
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