Boeing says capital markets key to $124B of jet financing

Bloomberg News

Chicago-based Boeing Co. said financing for $124 billion of aircraft due to be delivered across the industry next year will come chiefly from capital markets, bank loans and cash, with reliance on export credit continuing to decline.

Bank-debt liquidity has been higher than expected for the past three years, rebounding from the credit crunch and global slump and reducing reliance on export credit in particular to historically low levels, Boeing said in a statement today.

The role of capital markets, including asset-backed bonds, continues to expand and such funding will account for a third of all plane financing in 2015, it said. Loans will contribute about 29 percent and cash about 25 percent, Boeing forecasts, with export credit supporting just 13 percent of purchases.

"The stable performance of aircraft finance and investment over the past few years, particularly through the global financial crisis, is attracting new participants and driving diversification," said Tim Myers, vice president for aircraft financial services as Boeing Capital Corp.

Leasing companies will support about 40 percent of all deliveries next year, Myers said. While growth will moderate in coming years, annual aircraft delivery finance requirements will reach $156 billion by 2019, he said.