Avolon Secures $1 Billion Dual-Tranche Unsecured Bank Facility, Expands Strategic Banking Ties in the Middle East
In a significant move to broaden its capital base and deepen regional banking relationships, Avolon Holdings Limited, a globally recognized leader in aviation finance, has announced the successful arrangement of a US$1.0 billion unsecured dual-tranche bank facility with six prominent financial institutions from the Middle East.
The financing deal, structured to include both a conventional tranche and an Islamic tranche, underscores Avolon’s strategic push to further integrate into the Middle Eastern financial ecosystem. The facility has a four-year tenor, providing the company with medium-term liquidity support as it continues to grow and manage its expansive aircraft leasing portfolio.
Strengthening Ties with the Middle East
This latest funding arrangement marks a continuation of Avolon’s increasing engagement with capital providers from the Middle East, a region that has shown growing interest in aviation-related investments. The facility builds on the momentum of a US$750 million credit facility arranged in June 2024, which already featured significant participation from regional banks. With the current transaction, Avolon has added five new banking relationships in the region, signaling both expanding interest from Gulf-based institutions and confidence in the company’s long-term growth prospects.
According to the company, the latest transaction not only adds fresh capital but also reflects a growing appetite in the Middle East for high-quality aviation finance opportunities. The incorporation of an Islamic finance tranche is particularly noteworthy, as it aligns with Shariah-compliant financing principles, making the facility more accessible and appealing to Islamic financial institutions.
Key Banks and Coordination Role
The coordination and execution of the deal involved some of the region’s most active players in corporate and aviation finance. Emirates NBD Capital Limited played a pivotal role, acting as coordinator, initial mandated lead arranger, and bookrunner. The firm was joined by Abu Dhabi Commercial Bank PJSC and Warba Bank K.S.C.P., who also acted as initial mandated lead arrangers and bookrunners, further highlighting the collaborative nature of the transaction.
The inclusion of a blend of conventional and Islamic financing structures also reflects a growing trend in cross-border aviation finance, where global lessors like Avolon are increasingly tailoring their funding structures to align with local market preferences.
Robust Q2 Capital Raise
The latest facility follows closely on the heels of another major funding announcement from Avolon. On April 29, 2025, the company disclosed the successful arrangement of a US$1.1 billion senior unsecured facility. When combined with the new $1.0 billion Middle East bank facility, Avolon has now raised a total of US$2.1 billion in unsecured financing in the second quarter of 2025 alone. This aggressive capital-raising activity positions the company strongly to pursue new growth opportunities, manage refinancing obligations, and maintain a robust liquidity position amid a competitive leasing environment.
CFO Remarks on Strategic Significance
Commenting on the development, Ross O’Connor, Chief Financial Officer at Avolon, emphasized the transaction’s alignment with the company’s broader financing strategy:
“This facility further expands our banking relationships in the Middle East consistent with our strategy of diversifying our sources of capital,” said O’Connor. “It demonstrates the strong appetite in the region for high-quality aviation lending opportunities, with Avolon’s positive financial trajectory and successful growth strategy ensuring the transaction was well supported.”
O’Connor’s comments reflect the company’s ongoing efforts to establish a geographically diverse funding base, reducing reliance on any single region or type of financial instrument. The strong demand from Middle Eastern banks also speaks to Avolon’s reputation in the aviation leasing market, which has been shaped by a solid balance sheet, consistent profitability, and a carefully managed global aircraft portfolio.
Avolon’s Role in the Global Aviation Finance Landscape
Headquartered in Dublin, Ireland, Avolon is one of the world’s largest aircraft leasing companies, managing a fleet that spans all major aircraft types and serving a broad range of airline customers worldwide. The company is known for its disciplined investment approach and its ability to access capital across a variety of markets and instruments, including public debt, private placements, secured bank debt, and unsecured facilities such as the one announced this week.
The aviation finance sector has been experiencing a resurgence in capital activity in the wake of global air travel recovery. As airlines globally resume and expand their fleets, the demand for leased aircraft has remained strong, providing lessors like Avolon with solid revenue streams and strategic growth opportunities. Against this backdrop, maintaining access to flexible, multi-currency, and multi-format financing is a key competitive advantage.
Islamic Finance Component Adds Depth to Deal
The inclusion of an Islamic tranche in the facility adds a unique dimension to the transaction. Islamic finance, governed by Shariah principles, prohibits interest-based transactions and instead favors profit-sharing and asset-backed structures. By accommodating both conventional and Islamic banking structures within a single facility, Avolon demonstrates a high degree of adaptability and cultural sensitivity, traits that are essential when operating in diverse financial environments like the Middle East.
This dual-structure approach may also open up further opportunities for Avolon to tap into the growing Islamic finance market, which, according to estimates, represents over $3 trillion in global financial assets. The successful structuring of this facility could set a precedent for future aviation finance deals with similar dual tranches.
A Broader Capital Markets Strategy
Avolon’s recent capital markets activity, including both the April and May 2025 transactions, points to a strategic effort to front-load its financing needs in an environment that continues to offer favorable credit terms. While global interest rates have remained elevated compared to pre-pandemic levels, Avolon’s ability to raise over $2 billion in unsecured funding in a short span demonstrates both its financial strength and market credibility.
Moreover, by establishing and deepening relationships with financial institutions in emerging markets like the Middle East, Avolon positions itself to benefit from diversified capital inflows, which can be particularly valuable during periods of market stress or volatility in Western markets.
About Avolon
Avolon is a leading global aviation finance company connecting capital with customers to drive the transformation of aviation and the economic and social benefits of global travel. We pride ourselves on our deep customer relationships, our collaborative team approach, and our fast execution. We invest with a long-term perspective, diversifying risk and managing capital efficiently to maintain our strong balance sheet. Working with 141 airlines in 60 countries, Avolon has an owned, managed, and committed fleet of 1,096 aircraft, as of 31 March 2025. www.avolon.aero
Note Regarding Forward-Looking Statements
This document includes forward-looking statements, beliefs or opinions, including statements with respect to Avolon’s business, financial condition, results of operations and plans. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond our control and all of which are based on our management’s current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as “believe,” “expects,” “may,” “will,” “could,” “should,” “shall,” “risk,” “intends,” “estimates,” “aims,” “plans,” “predicts,” “continues,” “assumes,” “positioned” or “anticipates” or the negative thereof, other variations thereon or comparable terminology or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts, including with respect to the closing of the Offering. Forward-looking statements may and often do differ materially from actual results. No assurance can be given that such future results will be achieved. Avolon does not intend, and undertakes no duty, to update any information contained herein to reflect future events or circumstances, except as required by applicable law.
