in Lessors & Asset managers , Capital Markets , Aviation Banks and Lenders
Monday 17 August 2026
Cap Markets: Aviation ABS issuances continue to push past records, leasing unsecured debt issuance hits $3.5bn in July
New aviation ABS issuances in recent weeks have pushed 2026 issuance totals well past 2025 levels. $12.382 billion in aviation ABS paper has now come to market in the first seven-and-a-half months of the year, with even the excluding-retained-tranches total of $11.45 billion exceeding 2025’s total issuance of $10.34 billion.
Aircraft lease ABS issuances account for around 74% of the aviation ABS total in the year to date, with $9.12 billion in total notes. The remainder of the paper comprises five aviation loan ABS issuances, totalling $3.26 billion.
Commentary on recent record aviation ABS totals has thus far come with a caveat - that a significant, though minority, portion of the total figure in recent years has come from aviation loan ABS, while previous years had been comprised solely of aircraft lease deals. While both ABS classes fit within the aviation market, aviation loan ABS offer much lower ‘look through’ LTVs to the underlying collateral, are typically higher-rated, and command tighter issuance spreads.
However, the $9.12 in lease ABS issuance alone so far in 2026 is close to meeting previous yearly highs in 2021 ($9.2 billion) and 2019 ($9.9 billion).
The latest deals to price in July and early August have also priced positively for their issuers, continuing the broader trend of tightening spreads over the past 24 months. It has been two years since the public aviation ABS market reopened in mid-2024, with issuance spreads tightening significantly since then for both aviation ABS classes.
New ABS pricing – July and August
PK AirFinance successfully priced its second loan ABS of the year, PKAIR 2026-2. The $813 million securitisation is backed by a portfolio of 42 loan facilities, representing a total of 110 loans to 39 obligors – coverage of the deal can be found here.
The deal priced with tranches A to D offered to the market, retaining only the A-F floating rate tranche. The A and B tranches priced with identical spreads to PKAIR 2026-1, with slight widening on the C and D tranches.
Carlyle Aviation Partners (Carlyle), one of the leading veteran aircraft lease ABS issuers, had been conspicuous by its absence in 2026 so far. However, the firm also returned to the market in July, pricing its latest deal – AASET 2026-1. The $717.45 million deal is comprised of four sets of notes, with the A-2 and B-2 tranches not issued at closing but rather using a delayed draw feature to fund the acquisition of four as-yet-undelivered aircraft.
AASET 2026-1 priced with an attractive A note spread of 145bps, the second aircraft lease ABS A note to break the 150bps barrier since the outbreak of conflict in the Middle East in late February.
More recent ABS deals include:
Alternative lender volofin Capital Management (volofin) returned to the ABS market with its second aviation loan securitisation, VFIN 2026-1.
HALO AirFinance (HALO), the JV from GA Telesis and Tokyo Century Corporation, priced its debut $390.2 million aviation loan ABS transaction, HALO 2026-1.
Leasing unsecured debt: SMBC Aviation Capital raises $2bn in July
Lessors tracked by Ishka Airfinance raised $3.5 billion in unsecured debt in July, in one of the highest volume months so far this year. The total raised on the unsecured market by lessors is now $16.87 billion, compared to $12.01 billion in the first seven months of 2025. There are, as of yet, no unsecured leasing issuances in August.
SMBC Aviation Capital led leasing unsecured issuance in July, issuing $2 billion across three sets of notes. The offering, the largest since the launch of the lessor’s capital markets program in 2016, was more than six times oversubscribed. The issuance was comprised of $650 million in three-year notes, $750 million in five-year notes, and $600 million in ten-year notes, which priced with spreads over treasuries of 70bps, 85bps, and 112bps – the firm’s tightest spreads to date, according to SMBC Aviation Capital.
AerCap also made a sizeable issuance in July, pricing $900 million in unsecured notes due 2031, which achieved a yield of 4.972% and a spread of 83bps.
Finally, towards the end of July, CMB Financial Leasing issued $600 million in unsecured floating rate bonds due 2029.
The Ishka View
2026 has already been a strong year for the aviation ABS market, and recent aviation loan ABS issuances show strong appetite for both products. With over four months left of the year, it will be interesting to see how far records for issuance volumes can be extended.
Meanwhile, the unsecured bond market continues to be a popular and important funding source for investment-grade lessors, with a busy July driven by SMBC Aviation Capital’s $2 billion in notes, which priced attractively for the firm. The lessor now sits in third place for unsecured issuance volumes so far this year, behind AerCap ($2.65 billion) and new family member Sumisho Air Lease ($4 billion).
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