United Capital Markets repackages $145 million of aircraft debt with triple-A tranche

New York, May 23 - United Capital Markets, Inc. said it repackaged $145 million of aircraft lease asset-backed securities into new bonds including a $100 million triple-A rated tranche.

The deal, UCAT 2005-1, is backed by $145 million in class A1 and class A2 notes previously issued through Lease Investment Flight Trust 1, a securitization of aircraft leases serviced by GE Commercial Aviation Services.

United Capital Markets was placement agent for the deal.

The $100 million class A note issued in the transaction was priced at par with a coupon of one-month Libor plus 35 basis points. It had a guaranty of full principal and interest from a bond insurer and was rated Aaa by Moody's Investors Service and AAA by Standard & Poor's.

"Through UCAT, we were able to add liquidity to the secondary market for senior aircraft ABS, while distributing AAA aircraft paper, a relative rarity since 2002," said John Devaney, chief executive officer and head ABS trader at United Capital Markets, in a news release. "The market will see more transactions like this across different asset classes from United Capital."

The deal is the first second-pay senior aircraft bond to be wrapped on a standalone basis. Previous transactions used zero-coupon Treasuries to defease the principal, while UCAT was a straight senior/subordinated transaction, United Capital Markets said.

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