KTB Investment raises $82 mn aircraft fund for lease to Singapore Airlines

KTB Investment & Securities Co. Ltd. and the Military Mutual Aid Association’s (MMAA) investment firm have recently closed a 91.5 billion won ($82 million) fund to acquire an Airbus A330-300 model for lease to Singapore Airlines.

The South Korean brokerage house and Mplus Asset Management Co. Ltd. completed the payment  for the purchase to a Chinese aircraft leasing firm on May 25, according to investment banking sources.

The fund consists of senior, mezzanine and subordinated tranches and will expire in around four years.

It drew domestic institutional investors, including three to four domestic insurance companies.

The expected income for the subordinated part includes capital gains from the future aircraft sale, as well as rental incomes from Singapore Airlines.

The sources declined to identify the investors and did not disclose expected average returns.

KTB Investment has raised similar-sized aircraft funds since last year to buy and lease A330 models, including a $85 million fund launched last December, together with Korea Investment & Securities Co. Ltd. and Mplus Asset.

In August 2016, KTB launched a $86 million aircraft fund to buy an A330 plane from a Chinese lessor for lease to Singapore Airlines.

By Yun Jung Hong

yjhong@hankyung.com