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Vedder Thinking | News Vedder Price Advises Kahala in $260 Million Aircraft ABS Notes Transaction

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Vedder Price is pleased to announce that it advised Kahala Ireland Investments, an affiliate of Kahala Aviation Holdings, LLC, in connection with a 30 aircraft ABS facility involving AWAS. The deal, a milestone in the 11-year history of Kahala, and representing its first investment in wide-body aircraft, is a $260.75 million fixed-rate asset-backed notes offering, comprised of US$199,250,000 of 3.81% Class A fixed-rate asset-backed notes and US$61,500,000 of 5.92% Class B fixed-rate asset backed notes issued by Diamond Head Aviation 2015 Limited. The Issuer also offered subordinate Class E Notes representing the equity interest in the Issuer, which were purchased by Kahala.

The Class A Notes and Class B Notes were rated A and BBB respectively by S&P and by Kroll. The notes are backed by a portfolio of aircraft which the Issuer will acquire from AWAS. The aircraft comprise a mix of narrow-body and wide-body jet aircraft that, as of May 1, 2015, had an average age of 16.41 years and were leased to 16 lessees based in 14 countries.

Dean N. Gerber, Chair of Vedder Price’s Global Transportation Finance team, commented, "We are delighted to have assisted Kahala with the purchase of the Class E Notes. This transaction further highlights our vast experience with ABS and capital markets products in the aviation sector."