You are currently viewing JetLoan Capital Newsletter

JetLoan Capital Newsletter

JetLoan Capital Newsletter

A Few Words From our President, Sam Harris

Most financial analysts are saying that interest rates are on the way up. In fact,as it relates to fixed rate jet loans, we have seen about a 50-basis point increase since the end of last year. Most banks that lend on new and used business jets prefer to structure the loans based on a five-year term and amortization periods of 10-15 years, depending on the age of the aircraft,usage characteristics, and other factors. A majority of these lenders index their fixed rate loans to a spread over the five-year interest rate SWAP. The calculation is as follows; Five-year SWAP 2.70 +spread 2.0 = fixed interest rate of 4.70%. So, since SWAPs have moved up,the lender has to raise the fixed rate offering to maintain the same spread. Depending on the size of the loan, fixed interest rates are moving into the 4.50-5.0% range. We have not seen aircraft borrowing rates this high in years, and most people believe that interest rates are going higher from here. If you have a maturing aircraft loan, it may be better to refinance it now (if you can do so without a pre-payment penalty) than to wait.

Recent Transactions Completed

2010 Beechcraft Baron G58 80% LTV 5-Year Term 
15-Year Amortization 
Fixed Rate 4.8% 
South US Client

A 1996 Gulfstream GIVSP 75% LTV, 5-Year Term 
20-Year Amortization
Fixed Rate at 4.5% Southeast US Client

A 2009 Phenom 100 
75% LTV 60-Month Term
96-Month Amortization
Fixed Rate 4.84% 
High Net Worth Client Located in the Western US