Welcome to SAIL Aircraft Finance Reports

Overview

Shenton Aircraft Investment I Ltd. (“SAIL Cayman”) is an exempted company incorporated with limited liability under the laws of the Cayman Islands on August 19, 2015. Shenton Aircraft Investment USA I LLC (“SAIL USA” and together with SAIL Cayman, “SAIL” and each of SAIL Cayman and SAIL USA, an “Issuer”) is a limited liability company organized under the laws of the State of Delaware, formed on September 3, 2015 as a wholly-owned subsidiary of SAIL Cayman.

SAIL was established to purchase and own a portfolio of aircraft that are subject to leases. MaplesFS Limited, as trustee (the “Cayman Trustee”) of a charitable trust declared under the laws of the Cayman Islands (the “Charitable Trust”) pursuant to a declaration of trust made by the Cayman Trustee (the “Declaration of Trust”) owns all of the issued shares of SAIL Cayman. SAIL Cayman holds all of the membership interests of SAIL USA.

Initial Portfolio

The initial Portfolio consisted of twenty four Aircraft all of the which are subject to operating leases and were being leased to twenty one Lessees (the “Lessees”) located in eighteen countries. The initial appraised value of the Aircraft in the initial portfolio (the “Initial Appraised Value”) was $1 billion. Of the twenty four initial Aircraft, three have been sold. One Aircraft was sold during the financial year 2016 and a further two were sold during the financial year 2017.

Leasing Subsidiaries

SAIL currently owns three special purpose Irish companies (the “Irish Companies”), to which it leases thirteen Aircraft and which in turn lease the Aircraft to individual Lessees. Seven of the Aircraft are being leased to individual newly-formed trusts which have been formed pursuant to trust agreements governed by the laws of the state of Utah (the “Cayman Utah Trusts”).This two-tier structure is designed to accommodate the tax or regulatory needs of certain Lessees. One of the Aircraft is being leased to an individual newly-formed Irish trust.

Initial Notes

On the Closing Date, SAIL Cayman along with SAIL USA co issued Series A Notes in the initial principal amount of $747,444,000 and Series B Notes in the initial principal amount of $60,532,000. Each series of Notes has an expected amortization schedule and an expected final payment date as well as a final legal maturity date. Payments on the Series B Loans are subordinated to payments on the Series A Loans to the extent provided in the Indenture.

Series E Notes

On the closing date, SAIL Cayman issued an initial Series E Note (the “Initial E Note”) to Sculptor SAIL S.á.r.l. (the “E Note Holder”). SAIL USA was not an issuer of the E Notes and is not an obligor under the E Notes. Payments are made to the E Note Holder in accordance with the order of priority in the Waterfall.

Initial S Certificate

On the closing date, SAIL Cayman also issued an initial S Certificate (the “Initial S Certificate”) to Sculptor SAIL S.á.r.l (the “S Certificate Investor”). SAIL USA was not an issuer of the S Certificate and is not be an obligor under the S Certificate.

The E Notes, the S Certificates are collectively referred to as the “Subordinated Securities”

The proceeds of the offering of the Initial Notes together with the proceeds of the sale of the Initial Subordinated Securites were used by SAIL as follows:

1. To fund the Required Expense Reserve,
2. To fund the Purchase Price of the Aircraft and
3. To pay any offering discount, commission and certain expenses related to the offering of the Initial Notes, Intial Subordinated Securities and related transactions.

Servicer

BOC Aviation (Ireland) Limited ( “BOC Aviation Ireland”), a wholly-owned subsidiary of BOC Aviation, acts as servicer (the “Servicer”) with respect to the Aircraft pursuant to a servicing agreement (the “Servicing Agreement”) between SAIL, the Issuer Parties and the Servicer. The Servicing Agreement sets forth, among other things, (a) the various duties of the Servicer with respect to the management and administration of the Aircraft and the related leases and (b) certain lease and sale marketing activities to be performed by the Servicer in respect of the Aircraft. SAIL pays the Servicer the Senior Servicing Fees and Subordinated Servicing Fees based on the value of the Aircraft, rental amounts due and rental amounts collected under SAIL’s leases and a Sales Fee for assisting in aircraft dispositions. The Servicer has certain rights to terminate the Servicing Agreement. BOC Aviation guaranteed in favour of the Issuer Group Members all of the payment and performance obligations of BOC Aviation Ireland under the Servicing Agreement.

Managing Agent

Phoenix American Financial Services, Inc. (“PAFS”) acts as managing agent (the“Managing Agent”) with respect to the Issuer Group pursuant to a management agreement (the “Management Agreement”) with SAIL, certain other members of the Issuer Group, the Trustee and the Security Trustee. The Managing Agent will provide certain administrative, accounting, cash management and other services to the Issuer Group. The Managing Agent receives a fee for its services.

Cayman Registered Office Provider

Maples Corporate Services Limited acts as registered office provider for SAIL in the Cayman Islands and performs certain registered office services for SAIL in the Cayman Islands under the terms of a Registered Office Agreement between SAIL and Maples Corporate Services Limited.

Ownership of SAIL

MaplesFS Limited, as trustee (the “Cayman Trustee”) of a charitable trust declared under the laws of the Cayman Islands (the “Charitable Trust”) pursuant to a declaration of trust made by the Cayman Trustee (the “Declaration of Trust”) owns all of the issued shares of SAIL Cayman. SAIL Cayman holds all of the membership interests of SAIL USA.

Governance of SAIL

SAIL Cayman is resident in Ireland for tax purposes and is managed and controlled through its board of directors in Ireland and SAIL USA is managed by its board of managers (each of the directors of SAIL Cayman and managers of SAIL USA, a “Director”, and each of the boards of SAIL Cayman and SAIL USA, a “Board”). Each Board can be comprised of up to three Directors. All of the Directors must be independent of BOC Aviation and its affiliates (collectively, “BOCA”), including the Sellers and the Servicer, and one of the Directors on each Board (the “Independent Director”) must also be independent of each E Note Holder, S Certificate Investor and their respective affiliates. Any Director who is not required to be independent of each E Note Holder, S Certificate Investor and their affiliates is referred to as an “Equity Director”. The S Certificate Investors will be entitled to remove and replace any Equity Director of SAIL Cayman, and the Equity Director or Equity Directors of SAIL Cayman will be entitled to remove and replace any Equity Director of SAIL USA. Under the Memorandum and Articles of Association of SAIL Cayman and the Operating Agreement of SAIL USA, the Equity Directors are entitled to remove the Independent Director if the Independent Director is incapable of performing his duties, and also to replace the Independent Director if the Independent Director resigns. Any resolution of a Board will generally require the affirmative vote of a majority of its Directors (or the Equity Director, if only one Equity Director has then been appointed), provided that the approval of all the Directors on such Board will be required for any resolution with respect to Unanimous Consent Matters or the approval of just the Independent Director for matters dealing with the Servicer if Competitor Control exists.