Oman Brunei Asset Management launches us208 million aviation leasing fund

Oman Brunei Asset Management SAOC (“OBAM”), previously known as Oman Brunei Aviation Leasing Company, has today launched an Omani Rial (RO) 80 million (US$208 million) aviation leasing fund, Oman Aircraft Leasing Fund 1 (the Fund), that will be listed on the Muscat Securities Market (“MSM”) with 8,000 units of RO 10,000 each (nominal value).
The Fund, being offered via a private placement, is a 12 year closed end mutual fund designed for local and regional financial institutions and UHNWI’s with RO 1 million (US$2.6 million) (excluding Offer Expense of RO 150 per unit) or more to invest.
The Fund is sponsored by Oman Brunei Investment Company (“OBIC”), who is a cornerstone investor with a subscription of RO 7.7 million, and will be managed by OBAM who will provide fund management and lease management services. OBIC along with other Initial Investors are subscribing for 1,540 Units for RO 15.4M, so the Private placement is for 6,460 Units at a Price of RO 10,150 per Unit (including Offer Expense).
Majid Al Toky, OBAM’s Chairman, commented “we are delighted to offer an attractive opportunity for investors to invest in the aircraft leasing sector. The launch is a culmination of over 12 months of diligent work with our stakeholders and partners, during which time we have purchased five new Boeing B737 aircraft with long-term leases to Oman Air, the national airline of the Sultanate of Oman, which will be the first assets into the Fund. This is a great start as it means that the Fund, which will have an aggregate buying power of up to US$500 million through the combination of the Fund capital and the use of limited recourse financing, will be effectively fifty percent invested soon after closing, giving investors a lot of visibility of and confidence in where the Fund’s investments are being made”.
Simon McLean, OBAM’s Chief Executive Officer, commented “we have carefully structured the Fund to provide the investors with an attractive stable running dividend yield of 7.5% or more secured on young and fuel efficient in-production commercial aircraft on lease to ‘top-tier’ airlines globally”, and that “going forward, the Fund will seek to diversify its asset and / or airline risk with investments in the GCC and further afield”.
Oman Arab Bank-Investment Management Group is the Fund’s Issue Manager & Sole Collecting Bank and OBAM and OBIC have been advised on the Fund by law firm, Curtis, Mallet-Prevost, Colt & Mosle LLP. National Bank of Oman (“NBO”) are Fund Administrator and Custodian.

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