MUFG has been providing a full suite of investment banking products for an aircraft owning client for a number of years.

Having closed a small Samurai loan in Japan, the client approached MUFG when it sought to re-enter the market and bring in new money. MUFG acted as a mandated lead arranger and facility agent for the client's loan facility.

A new frontier

Samurai loans are becoming increasingly popular with borrowers seeking to tap into regional Japanese markets, in particular in the oil and gas, and energy sectors. However, this transaction provides a rare example of an aviation client making a foray into the Samurai loan market.

The loan facility enabled the client to access longer-dated money, and MUFG opened up a wider market of investors. Also crucial to the success of the loan was MUFG's superior position in the Japanese market. While the client was widely banked, MUFG's access to the regional market allowed the client to access some hitherto untapped sources of liquidity.

When co-ordinating with the lenders, MUFG also educated them on the client's different approach to what they were more used to seeing in the Japanese market. The ability to bridge this gap, alongside MUFG's centuries-long history as a leading financial services company in Japan, gave regional banks confidence in the transaction.

Establishing foundations for future

The syndication was successfully oversubscribed. Further to the success of this loan, MUFG has helped the client to build new relationships and continue to establish a track record in the Japanese market. In doing so, the client is well-positioned for future approaches to the Samurai loan market.

In addition, following MUFG's education of Japanese lenders on the aircraft leasing industry, this transaction paves the way for other asset owners in EMEA, America and Asia to tap the market.