Prospect Capital Corporation announced today that Prospect has invested $92 million of debt and equity in Echelon Aviation LLC (“Echelon”). Prospect is the controlling shareholder of Echelon.
Established in 2014, Echelon is an aircraft leasing company. Concurrent with the Prospect investment and management team co-investment, Echelon has acquired the majority stake of a diversified portfolio of 11 commercial aircraft, including narrow-body, wide-body, and regional jets. With a weighted average five year lease term, the aircraft lessees include six global and regional airlines that are well positioned in their respective markets to capitalize on high air traffic growth trends. One of the largest full-service aircraft leasing companies in the world acts as the servicer of this portfolio, and this servicing company has made a significant minority co-investment in the portfolio.
Echelon is led by Marc Cho, who brings to the company over 17 years of aircraft leasing experience at Bank of America Merrill Lynch, DVB Bank, GE Capital Aviation Services, and Heller Financial.
“Our initial acquisition creates an asset base with highly marketable aircraft body types with a strong focus on downside protection through leases to credit worthy global carriers,” said Marc Cho, President of Echelon. “We look forward to growing Echelon with the capital backing of Prospect, which brings to bear a rigorous underwriting approach, access to scale-driven capital, and time-sensitive decision making as significant differentiators in the aircraft leasing marketplace.”
“The aircraft leasing sector presents attractive return opportunities due to cash flow consistency from long-lived assets coupled with hard asset collateral,” said Sachin Sarnobat, Principal of Prospect Capital Management LLC. “We are pleased to support the growth of Echelon Aviation and are delighted to have Marc on board as an industry veteran to lead the business.”
Currently with over $6 billion of capital under management, Prospect closed approximately $3.3 billion of new originations during the year ended March 2014.