(MENAFN- Khaleej Times) While lending regulations in some parts of the world posed challenges to aircraft financing, Middle East institutions continued to surpass expectations for new delivery financing of Boeing commercial airplanes, the leading manufacturer has said.
"From the time historically when Middle East institutions funded about one-fifth of the regions deliveries with their own capital, this year we expect to have two-thirds of Boeing deliveries here covered, which is a seven per cent increase over 2012s explosive growth," said Rich Hammond, a senior director of Boeing Capital Corporation, the manufacturers financing and leasing unit.
At its annual financiers and investors conference for the Middle East, Africa and South Asia region held in Dubai last week, Boeing said plane makers were bracing for record deliveries in 2013, with Middle East financing for US-built jetliners doubling between 2011 and 2012 to approximately $6.4 billion. -Bloomberg
Boeing told the audience of some 150 commercial bankers and investment officials that the regions increased investor interest in aircraft was helping offset adjustments from other primary funding sources this year. These obstacles included limits on bank lending from new global regulations and higher fees for export credit agency financing for planes. "In todays more globally diversified pool of commercial banks, the Middle East is rivalling support for our products from the likes of other economic powers," Hammond said. Boeings latest 20-year outlook for commercial aviation forecasts a $4.8 trillion market for jet transports. Of that, the Middle East region is expected to require 2,610 aircraft valued at $550 billion.
In tune with the demand, aircraft financing is also seeing a major surge in support from the capital markets, where airline bond issuances, backed by new and used aircraft assets, are many times oversubscribed and pricing at record-low rates. "Theres keen interest by Middle East banks to work with the capital markets to help originate and syndicate regional aircraft financing opportunities, and Boeing is working together with financial institutions here on structures that will facilitate such opportunities," said Kostya Zolotusky, Boeing Capital managing director for capital markets development and leasing.
As an example, Boeing said it would host the regions first-ever capital markets summit in Dubai on October 22, which would be co-hosted by Boeings partners - the National Bank of Abu Dhabi, Deutsche Bank, and airline customers Emirates and Etihad.
"Boeings relationships in the region run long and deep, and its exciting that mutual interest in aircraft financing is providing us many new partnering opportunities as we to bring together the relevant participants," said Jeffrey Johnson, president of Boeing Middle East, who will co-host the markets summit.
Boeing said it also expected increased investor appetite for expanding deliveries outside of the Middle East region. "Savvy Middle East investors recognise our aircraft as superior investments, and were ecstatic with those prospects," Hammond said.
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