Boeing Sees Aircraft-Backed Bond Issues Doubling to $30 Billion

(Bloomberg, Sydney, 10 July 2013) Aircraft buyers’ issuance of bonds backed by planes will double to about $30 billion next year, as banks and ECAs withdraw funding Boeing said... The industry needs $4 trillion to $5 trillion by 2031 to buy about 40,000 new planes required by growing demand from emerging economies, IATA said... Of concern is the withdrawal of funding from commercial banks as they limit lending in line with the Basel Committee on Banking Supervision’s 2010 revision of minimum capital levels, known as Basel III. Banks will provide about $29 billion to finance about 28 percent of aircraft deliveries this year, according to Boeing... Government export credit agencies, which stepped in to finance aircraft purchases after the 2008 credit crisis froze capital markets, are also cutting back. Funding from ECAs this year will be lower than Boeing’s initial forecast, at about 20 percent of the $104 billion total, compared with about 30 percent during 2012, Zolotusky said.