The transaction demonstrated real African collaboration, with a bank of African origin providing a full end-to-end advisory and arranging solution to its African client. In addition, Investec provided Comair with a facility to fund the pre-delivery payments for the aircraft. Investec approached local and international banking markets on behalf of Comair to secure senior debt and successfully managed the primary syndication thereof to Nedbank, who participated as guaranteed lender.
Commenting on the award, David Minty, head of aviation finance Africa at Investec Bank, said:
“We are extremely honoured to receive this award, especially in the context of the difficult operating environment we are seeing globally, which has had an adverse impact on African economies. These challenging conditions reinforce the importance of long-standing relationships. It is through our 15-year relationship with Comair and our understanding of their requirements that we were able to structure a tailor-made, multi-jurisdictional deal, pulling together our relationship with the manufacturer, Boeing and the Export –Import Bank of the United States (EXIM Bank).”
The structure of the deal resulted in Comair being able to raise competitive long-term Rand funding on the back of an EXIM Bank guarantee issued in local currency. This gave rise to a number of benefits for Comair, including the mitigation of foreign currency risk, which many airlines in non-US Dollar jurisdictions are exposed to in the normal course of business. This natural currency hedge proved invaluable owing to the ongoing Rand-US Dollar exchange rate volatility.
Kirsten King, Finance Director, Comair Limited said:
“Our long-term relationship with Investec led to the innovative deal structure, speed and execution of this transaction in an increasingly volatile financial market environment, where timing was critical. Arranging financing for the purchase of aircraft is incredibly challenging at the best of times and we are grateful to Investec for their expertise in securing the best term-funding solution for us”.
This transaction highlights Investec’s unique capability among African banks to undertake and implement an Export Credit Agency advisory and arranging role. Until recently, these roles have typically been performed by international banks. This deal represents Investec’s second such aviation transaction for Comair and consolidates Investec’s position as the leading local bank in the field.
"This transaction once again bears testament to Investec’s ability to structure deals according to our client’s requirements and demonstrates the leading role local and regional banks can play in international aviation and export credit financing. It also reflects our Export and Agency Finance global reach through our London and New York offices. Despite the tepid global growth outlook, we still see opportunities in the African aviation market and our strong relationships and visibility ensure that we are well positioned to take advantage of these."