Kookmin Bank commits $20 mn to two aircraft junior debt funds

  • 2019-03-15

Kookmin Bank, South Korea’s biggest lender, has committed $20 million to two aviation funds to provide junior and mezzanine loans for Airbus and Boeing aircraft.

Novus Aviation Capital, a Dubai-based aircraft leasing company, manages the two funds — Tamweel Aviation Finance (TAF) II and Cedar Aviation Finance (CAF) — which target to raise $400 million and $300 million respectively, according to Kookmin on March 13.

Kookmin commit $10 million each to both funds launched in 2018. It will resell them through its sister company KB Securities Co. Ltd.

TAF II was formed in partnerships between Airbus, Novus Aviation, Development Bank of Japan, Germany’s Norddeutsche Landesbank (NORD/LB) and Airbus Group Bank.

In the CAF fund, Boeing, Novus Aviation, Development Bank of Japan Inc and NORD/LB participated.

Novus Aviation Capital has an aircraft portfolio under management of around 50 aircraft worth nearly $4 billion.

Given record numbers of new aircraft deliveries, the junior and mezzanine financing segment remained underserved in the aviation finance market, Novus Aviation’s managing director Mounir Kuzbari was quoted as saying in an interview last September.

Kookmin said that it has been expanding its presence in global alternative investment markets and will continue to make aggressive cross-border investment.

<Edited by Yeonhee Kim>

(Photo: Getty Images Bank)