BASYCS – CORPORATE JET FINANCE SEMINAR 26.04.2018

26.04.2018
Hotel Métropole, Geneva
8H - 10H

On Thursday the 26th of April 2018, the BUSINESS AVIATION & SUPERYACHT COMMUNITY, SWITZERLAND, (BASYCS) had the pleasure of commencing its breakfast seminar series, with a dedicated Corporate Aviation Finance theme that was presented by BASYCS Members and co-sponsors, BNP PARIBAS (SUISSE) SA and MEYER AVOCATS, Geneva.

Family offices, aviation law firms, jet operators, brokers and private banks heard a presentation by Jet Finance specialist Marie-Laure Gassier of BNP Paribas and Aviation lawyer Raphaël Baeriswyl of Meyer Avocats.

Ms Gassier and Mr Baeriswyl’s presentation “AVIATION FINANCING: STAKES AT PLAY FOR CLIENTS AND FINANCIERS?” commenced with an examination of prevailing market drivers before going on to examine the differing but often complementary motivators between financier and customer when the latter decides to finance their corporate jet. According to market intelligence the Global Fleet of corporate jets reached 22’368 units in 2017, a 126% increase since 2000[1], and demand especially in the pre-owned market continues to grow. Of the 2668 deliveries in 2017, 75% of those were for pre-owned Jets[2].

Given the relatively low central bank rates and the high cost of the assets concerned, it makes sense for owners (both new and existing) to explore financing opportunities with specialist banks such as BNP Paribas that, as part of their private bank offering, provide credits on a case-by-case basis for corporate jet acquisition.

Mr Baeriswyl then went on to consider the key milestones in the negotiation of a corporate jet financing, from agreement on the initial terms of the financing or refinancing, to the closing of the documentation and negotiation process. It was an interesting observation that, as far as a bank is concerned, it has fulfilled its central contractual obligation under the finance documents (i.e. provision of the loan), upon the moment of drawdown, post completion. However, the borrower’s obligations (essentially to repay the loan and maintain the asset in the state and operation agreed under the finance documents) continue for the term of the loan, which can be anywhere from 5-7 years. Given this dynamic there is an equilibrium to be found between the interests of the lender with its entitlement to be repaid and those of the borrower with the its right to quiet enjoyment of its jet.

This highly informative and discursive presentation stimulated much in the way of discussion and Members and Friends were able pose questions afterwards while enjoying coffee and fabulous continental breakfast provided by the Hôtel Métropole.

BASYCS is most grateful to BNP Paribas (Suisse) SA and Meyer Avocats for their generous sponsorship of this successful event.

 

[1] Source: AMSTAT, Ascend, Honeywell, Bombardier

[2] Source: JetNet, Gama