Aircraft Financing – What You Should Know

Legal and administrative service providers in the Cayman Islands can offer aircraft owners and financiers much more in the way of financing, leasing, securitisation and ownership structures not limited to Cayman registered aircraft. A common component to these structures is the use of a Cayman Islands special purpose vehicle ("SPV"), through which funding and leasing arrangements may allow for certain tax, accounting and regulatory relief.

SPV Formation

In a typical structure using a bankruptcy remote SPV, the company is incorporated as an exempted company, the shares of which are issued to a Cayman Islands trustee (usually a licensed trust company) for the benefit of a charitable or purpose trust. The aim is to ensure that the SPV's shares are vested in a third party so that it is not regarded as a subsidiary of the originator or financier.