Avolon Taps Middle East for $455M in Strategic Funding Push

DUBLIN, IE – April 17, 2026 – Global aviation finance giant Avolon Holdings Limited has secured a new US$455 million unsecured revolving credit facility, a strategic move that deepens its financial ties with the Middle East and underscores the growing influence of the region's capital in the global aviation market. The deal is a key part of a larger, aggressive fundraising campaign that has seen the Dublin-based lessor raise US$2.5 billion in new unsecured financing in 2026 alone.

The five-year facility, syndicated by a consortium of five banks primarily from the Middle East, is notable for its innovative dual-tranche structure, which includes both conventional and Islamic finance components. This transaction not only diversifies Avolon’s capital sources but also signals strong market confidence in its financial stability and growth strategy amidst a booming aircraft leasing sector.

A Strategic Pivot to New Capital Horizons

This latest financing marks a significant expansion of Avolon’s global funding platform, deliberately targeting new pools of liquidity. By partnering with a syndicate led by Emirates NBD Capital and Dubai Islamic Bank, Avolon is tapping into a region with a significant appetite for high-quality, long-term investments in aviation. The participation of Standard Chartered Bank, Emirates Islamic Bank, Al Ahli Bank of Kuwait, and Sharjah Islamic Bank further cements the facility's strong regional backing.

The move reflects a broader industry trend where major players are looking beyond traditional financial centers in Europe and North America. Middle Eastern financial institutions are increasingly sophisticated and active participants in global asset finance, leveraging their substantial capital reserves to fund large-scale infrastructure and transportation projects.

In a statement, Avolon’s Chief Financial Officer, Ross O’Connor, highlighted the strategic importance of this partnership. “This facility marks another step forward in the continued expansion of Avolon’s global funding platform,” he commented. “Securing significant, long‑term unsecured capital from Middle Eastern banks underlines the strength of our credit proposition and the confidence lenders have in our strategy, balance sheet and execution capabilities. We see the region as a key partner in supporting Avolon’s next phase of disciplined growth.”

This confidence is built on Avolon's robust financial footing. The company reported a net income of US$591 million in 2025 and ended the year with a formidable liquidity position of US$10.7 billion. With a healthy net debt-to-equity ratio of 2.4 times and 77% of its debt being unsecured, Avolon presents a low-risk, high-value proposition for lenders, a fact underscored by positive outlooks from credit rating agencies like Moody's and Fitch.

The Dual-Tranche Advantage: Blending Tradition with Innovation

The facility’s dual-tranche structure, combining conventional lending with a Sharia-compliant Islamic tranche, is a masterstroke of financial engineering. This approach allows Avolon to access a much broader spectrum of investors, including a vast and growing pool of capital within the Islamic finance world that is mandated to invest according to specific ethical principles.

Islamic finance, which prohibits the charging of interest (riba), often utilizes asset-backed structures. In aviation, the most common structure is Ijarah, a form of leasing where the financier purchases the aircraft and leases it to the airline or lessor. The rental income provides a Sharia-compliant return for investors. By incorporating this structure, Avolon not only secures funding but also enhances its reputation and relationships in key Islamic markets across the Middle East and Southeast Asia.

This innovative approach is not just about accessing more money; it's about building resilience. Diversifying funding sources makes a company less vulnerable to shocks or tightening credit conditions in any single market. It provides the operational flexibility needed to navigate the cyclical nature of the aviation industry and to seize growth opportunities as they arise.

A Competitive Race for Diversified Funding

Avolon's move is part of a larger, competitive race among the world's top aircraft lessors to secure flexible, long-term, and diversified capital. The industry is witnessing a paradigm shift in funding strategies, with a clear move towards unsecured debt and alternative capital markets.

Avolon's primary competitors have been making similar strategic plays. Industry leader AerCap broke new ground with its maiden US$500 million Sukuk (an Islamic bond) issuance in late 2024. Air Lease Corporation (ALC) also successfully tapped the market with a US$600 million Sukuk in 2023. Meanwhile, SMBC Aviation Capital recently secured a US$1.5 billion global syndicated facility from a wide array of international banks, and Dubai Aerospace Enterprise (DAE) upsized its own revolving credit facility to US$4 billion, also using a dual conventional and Islamic structure.

This collective pivot highlights a crucial reality in the post-pandemic aviation market: having a diversified, global, and innovative funding playbook is no longer a luxury but a prerequisite for staying competitive. The ability to raise billions in unsecured capital, as Avolon has done, is a powerful market signal of investor trust and a validation of the company's business model.

Capitalizing on a Resurgent Aviation Market

This aggressive fundraising comes at a pivotal moment for the global aviation industry. Air travel demand is surging, with IATA forecasting continued passenger traffic growth into 2026. However, this demand is colliding with significant supply-side constraints. Production delays at major manufacturers and persistent issues in the engine maintenance, repair, and overhaul (MRO) supply chain have created a meaningful shortage of available aircraft.

For lessors like Avolon, this imbalance is a golden opportunity. The scarcity of new planes drives up the value and lease rates for the existing global fleet. Airlines, desperate to expand or modernize their fleets to meet passenger demand, are increasingly turning to the leasing market for solutions. Avolon, with an owned, managed, and committed fleet of 1,131 aircraft, is perfectly positioned to capitalize on this trend.

The US$2.5 billion raised this year will provide Avolon with the dry powder needed to execute its strategy of disciplined growth. This includes funding its order book for new, fuel-efficient aircraft from Airbus and Boeing, as well as pursuing attractive sale-and-leaseback opportunities with airlines seeking to free up capital. By securing long-term, unsecured funding from diverse sources, Avolon ensures it has the financial firepower to support its airline partners and drive the ongoing transformation of global aviation.