Jan 17 Wells Fargo & Co on Thursday said
it is forming a new business that will lease airplanes as it
looks for fresh ways to boost returns.
The No. 4 U.S. bank by assets is teaming with Irish aircraft
leasing company Avolon to form a Dublin-based joint venture
called Avolon Capital Partners that will buy new planes from
airlines and lease them back.
The initial target for the aircraft portfolio is $500
million, Avolon said. Wells will be the majority shareholder and
provide banking and debt financing for the business.
In a statement, Wells' head of asset-backed finance, Julie
Caperton, said the bank was pleased to deepen its relationship
with Avolon, a long-standing client. Since its start in 2010,
Avolon said it has raised $3.7 billion of debt capital from a
number of financial institutions, including Wells.
A year ago, Wells Fargo lost an auction to buy Royal Bank of
Scotland's aircraft leasing business to Japan's Sumitomo
Mitsui Financial Group and Sumitomo Corp. The
San Francisco-based bank has been active in buying portfolios
from European banks as it strives for more interest income.
The formation of the venture is subject to regulatory