Transaction Documents Fiona Leung and Director Process Transaction
- Slides: 7
Transaction Documents Fiona Leung and Director, Process Transaction Management
Overview Lessor Operating platforms – participants in the transaction process Internal Controls and Approvals – what are the typical steps to approve and close a deal Documenting a transaction – LOI vs lease negotiations Lease management – roles and interfaces within the company © HKAC | Hong Kong | 3 Nov 15 | 2
Department Commercial Core functions and responsibilities § § § Capital Markets § § § Risk Management § § § Technical § § § Transaction Management § Finance, Treasury and Tax § [Operations] Lessor Operating Platform § § § § New business Relationships with airline clients and manufacturers End of lease remarketing programmes Debt and equity funding Relationships with capital providers End of lease refinancing Due diligence on potential lessees, Periodic reviews on lessees Counterparty and Asset ratings Management of Investment Committee and Board Approval processes Technical input to transaction negotiation Deliveries, transitions, technical data and inspections Relationship with manufacturers, lessee technical and maintenance providers Structuring, negotiation, documentation and closing Post-closing portfolio management Relationships with lessees, capital providers and legal advisors Regulatory compliance and reporting Financial modelling, statutory and management reporting Treasury / Financial planning and forecasting/ Tax Structuring Corporate Governance and Company Secretarial Human Resources Business Information Systems and ICT © HKAC | Hong Kong | 3 Nov 15 | 3
Controls and Approvals Deal investment process – from origination to lease management Origination and assessment Commercial Committee Letter of Intent Investment Committee/ Board Due diligence Documents § - What type of Deals? - Lessor Platform Strategy Leasing, Sale and Lease-backs (or “SLBs”) Aircraft Trading (portfolio acquisitions and aircraft sales) Manufacturer Orders § - Controls and Approvals Commercial Committee Investment Committee Board Approval Transaction Approval Committee § Portfolio / Transaction Management © HKAC | Hong Kong | 3 Nov 15 | 4 Transaction Approval Committee Funding and delivery Management
Negotiating the LOI Negotiation Point Teams involved § Asset and Lessee § Senior management, Commercial § Lease term § Commercial, Capital Markets, Treasury § Rent § Commercial, Capital Markets, Treasury § Technical, Commercial § Commercial, Risk Management § Maintenance Reserves § Cash or Letter of Credit § PBH agreement Security Deposit § Structure and registration § Transaction Management, Tax § Return conditions § Technical, Commercial § Insurance § Commercial, Risk Management § PDP Financing § Commercial, Capital Markets, Treasury § © HKAC | Hong Kong | 3 Nov 15 | 5
Negotiating the Lease Negotiation Point Teams involved § Subleasing § Transaction Management, Risk Management § Engine pooling § Transaction Management, Technical § Events of default • § Default interest rate § Transaction Management, Treasury § Covenants § Transaction Management § Indemnities § Transaction Management, external counsel § Conditions precedent § Transaction Management, local external counsel § Insurance § Transaction Management, insurance advisor § Lease assignment § Transaction Management § Governing law and forum § Transaction Management, local external counsel Transaction Management, external counsel © HKAC | Hong Kong | 3 Nov 15 | 6
Lease Management Managing the Lease Cycle End of Lease Term Pre-Delivery Acceptance and Delivery If No Lease Extension Acceptance and Redelivery Lease Term Inspection of Aircraft and the Records and Check Maintenance Program Physical Inspection Selling or Storage/Insurance Releasing Aircraft (if needed) Start Remarketing Transition (9 -18) months Physical Inspection Compliance with Lease Rent and MR invoicing Return Conditions Check Utilization Calculate Return Maintenance Status Reports Compensation Physical Inspections, Lease Management, Risk Management and Insurance © HKAC | Hong Kong | 3 Nov 15 | 7
