Oaktree Selling U.S. Aircraft Lease Firm to Mitsubishi UFJ Lease for $1.27 Billion

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The aviation finance industry is increasingly attracting Japanese banks looking to capitalize on its growth potential as domestic demand shrinks and the yen increases in value.

Reuters and The New York Times reported yesterday that Japanese Mitsubishi UFJ Lease has agreed to buy the U.S. aircraft leasing firm Jackson Square Aviation, whose parent is JSA International Holdings, from the Oaktree Capital Group for approximately $127-$130 billion ($100 billion yen).

The acquisition is supposed to take place in December, a statement from Mitsubishi said, and will be paid for with cash and new loans. Mitsubishi UFJ Leasing is a unit of Mitsubishi Corp.

"Not only in aviation leasing but in other areas as well, we may make further acquisitions when there are companies with good assets," noted a Mitsubishi UFJ Lease spokesman as reported by Reuters.

The new acquisition adds to another aircraft lease operation Mitsubishi UFJ Lease set up in Dublin earlier this year, with a fleet of about a dozen planes, Reuters reported.

Oaktree provided $500 million in seed money for Jackson Square in 2010, the Times reported. The San Francisco-based company has a fleet of about 70 aircraft.

Mitsubishi UFJ Lease and Finance currently leases industrial machinery, real estate and automobiles, and said the deal for Jackson Square would help it branch into a new business line and capitalize on rising global aircraft passenger volumes, The New York Times reported.

Factors contributing to the industry's growth potential include an increasing number of low-cost carriers and the expectation that air travel will grow as emerging markets become more established.

Related Articles:

https://dealbook.nytimes.com/2012/10/04/mitsubishi-leasing-unit-to-pay-1-3-billion-to-oaktree-for-aircraft-leasing-firm/

https://dealbook.nytimes.com/2012/10/04/mitsubishi-leasing-unit-to-pay-1-3-billion-to-oaktree-for-aircraft-leasing-firm/

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