We lend to investment grade corporate and public sector entities, working with borrowers to complement or extend debt finance from banks. Since entering the market in 2016, we have completed £1.9 billion* of transactions in the UK, Europe, the US and Australia.
As long-term lenders to a business, we are stakeholders in its future success. Therefore, we seek to develop and build relationships with each of the businesses that we lend to. Knowing these businesses helps us to understand any stresses in their business models and also ensures we are well placed to provide further support if needed.
In contrast to public markets, many borrowers in the private markets are not rated. Leveraging our direct access to management teams, our in-house credit analysts assign independent ratings that mirror the methodology by external credit rating agencies. This helps us ensure each deal is structured appropriately and the level of compensation adequately reflects the risk taken.
Goshawk Aviation, Ireland
Case study: Alternative sources of long-term contracted cash flows
Private credit markets are increasingly providing borrowers with funding options that historically would only have been available via banks. For institutional investors this creates the ability to diversify into new sectors, generating attractive returns in assets that also enjoy strong documentary protections. This is typified by our involvement with Goshawk Aviation.
Based in Ireland, Goshawk Aviation (Goshawk) is a specialist aircraft leasing platform with a US$5.8bn* portfolio of new or nearly new commercial jet aircraft leased to leading global airlines.
Goshawk borrowed over $500mn* in the private placement market. We were able to support the Group in its aspirations to grow whilst providing an excellent diversification opportunity for our clients in a business with strong financial fundamentals.
*Source: LGIM Real Assets, as at 31 December 2017