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  • Repo firms probably know the plane location in Russia. Question is how to bring it out Russia safely today.
  • Following is an excerpt from today's column by Matt Levine in Bloomberg's "Money Stuff".
    Russia’s decision to block foreign owners from seizing hundreds of planes worth about $10 billion is roiling a market where aircraft leases are bundled into bonds and sold to investors.

    European Union sanctions imposed on Russia because of its Ukraine invasion give plane owners until March 28 to retrieve the vehicles. But only a handful have been extracted, and hopes for more are dim.

    And so some asset-backed securities in the aviation space are coming under duress as a result. Although these types of transactions are designed to survive cash flow problems at the airlines leasing the planes, fully losing access to planes under these circumstances almost guarantees that lease payments that feed these ABS deals will soon dry up, with recourse uncertain.

    One fascinating thing here is that, if you are a lessor or lender, you have a lot of legal levers to pull to try to get your planes back, and the lessors are getting creative about pulling them. The lessor can for instance affect the insurance status of the plane, which can affect its official airworthiness, which can get it grounded:

    Those able to react quickly have been able to salvage a handful of planes whose insurance and airworthiness certifications are being revoked one by one.

    But on the other hand the lessee — the Russian airline — can just launch the plane into the sky and fly it to Russia, where you can't get it.
  • Thanks. It is getting very complicate.

    Same question can be asked about those expensive yachts and properties owned by the Russian oligarchs that were seized. Can't exactly selling them without going through legal proceeding.
  • @Sven : Did you happen to see the report on Russia money laundered through real estate in England ?
  • No. Please link the article. They behave like gangsters. If this happens in England,they could be doing it everywhere.
  • @Derf- yes, that's an old story. When we toured there some years ago our guides pointed out huge blocks of apartments in wealthy neighborhoods that were almost totally Russian-owned.
  • Not surprised. But it makes me shake my head and growl. Loudly.
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