Structuring Aviation and Shipping Financing: A Practical Guide to Getting the Foundation Right

Annie: Hello, everyone. Welcome to today's webinar, "Structuring Aviation and Shipping Financing: A Practical Guide to Getting the Foundation Right." My name is Annie Triboletti. I will be your host for today. So we are pleased to be joined today by our moderator and our three speakers. So without further ado, I will turn things over to our moderator, Diederik, [00:00:30] to get us started and to introduce our speakers. Diederik?

Diederik: Very good. Thank you very much, Annie. Hi, everyone. Welcome to today's webinar. My name is Diederik de Jonge. I'm a Director of Business Origination for the Global Trust and Agency Team and Capital Markets here at CSC, and I'll be moderating today's session. Before we dive in, I'd like to briefly introduce the wonderful panel that we have today. We've got for [00:01:00] you Ellen Heyerdahl at Thommessen, we've got Borger Melsom at Pareto Securities, and Ylva Axelsen at CSC. Ellen, would you please like to start with a brief introduction, followed by Borger and then Ylva?

Ellen: Sure. Thank you, Diederik, and thank you to CSC for inviting us to take part in this webinar. As you say, my name is Ellen Heyerdahl. I'm a partner at Thommessen in our Banking and Finance Department. [00:01:30] We are the largest law firm in Norway, consistently rated a Tier 1 firm, and we boast nearly 350 lawyers. We cover all areas of business law, including aviation and shipping. Our offices are in Oslo, Bergen, and Stavanger, and then we also have an office in London for more than 20 years. So although most of our work is international, we practice only Norwegian law, and our goal is to be the world's best Norwegian law firm. I have [00:02:00] more than 20 years experience working with the shipping and aviation finance, and that's actually what I started out doing way back when, when I became a lawyer. So thank you.

Borger: And I'm Borger Melsom. I am a partner at Pareto Securities focusing on debt capital markets. Pareto is a global full-service investment bank headquartered in Oslo. And we have around 500 [00:02:30] employees across 13 offices in 10 countries. Thank you.

Ylva: And I'm Ylva Axelsen. I'm head of Capital Markets in Norway. My background is in law and banking, with a focus on global maritime loans. And CSC is a leading provider of business administration and compliance solutions. We have more than 8,500 professionals across 5 continents, and we support capital markets [00:03:00] transactions and lending across industries, including aviation and shipping.

Diederik: Fantastic. Thank you all very much for the introductions. So onward with the panel discussion. We're going to spend the next 30 minutes discussing some of the key structuring considerations in aviation and shipping finances. We'll cover everything from how these transactions are set up at origination to the practical role of SPVs, security [00:03:30] packages, governing law choices, and some of the issues that tend to emerge in later phases of the life cycle of these deals. We'll also dive into the Nordic bond market and figure out why it has become such an important source of funding for these sectors.

And with that, let's kick off with the first question. So when structuring aviation and shipping financing, what are the first [00:04:00] decisions that shape the rest of the transaction? Perhaps, Borger, you kick off with this one and then Ellen responds.

Borger: Yes. I would say there are three main decisions that shape the transactions from the offset. Firstly, it's the scope of the transaction. Is it a corporate financing? Is it a fleet financing? Or is it more of a single asset financing? And then, is it secured or is it unsecured? And secondly, [00:04:30] it's the perimeter of the credit group, meaning which companies or entities provide the guarantees, which provide security, and what security. And then thirdly, it's the issuing entity itself. Is it a holdco? Is it a financeco? Or is it an SPV? And in which jurisdiction is that entity incorporated? And getting these three decisions right from the offset really matters, [00:05:00] not only for the structuring of the immediate financing, but more importantly for establishing a sustainable financing platform that suits the company's medium to long-term plans because the structures you put in place in the first deal tend to sort of define the financing path for years afterwards.

Ellen: Yeah. I agree with that, Borger. [00:05:30] And I also think, just to add, that not only the perimeter of the credit group but also the security package is a key decisive factor, where the jurisdiction of both the assets and also where the obligors are incorporated will have a significant impact on the deal. It will impact what type of security can be taken, the potential enforcement alternatives, and you also come across local restrictions on what kind of guarantees and [00:06:00] securities obligors are permitted to grant in a financing.

Another factor, which is decisive, is the contracted revenue the asset generates. Depending on sort of the type of financing at all, that can be very important. It can range from either very volatile spot market revenue to long-term lease contracts with solid counterparties. And obviously that [00:06:30] will make a difference to the creditors and how they want to structure the financing.

And then, finally, and I'll touch upon that later too, I think the costs of setting up the sort of the contract infrastructure will also shape the structuring. And I'm especially thinking about the security package here. Especially for aircraft financing, you have the ability to take security pursuant to the Cape Town Convention, and that's sort of very, very efficient and very [00:07:00] cost-effective and also grants priority over local law. So that's an important part, at least from a lawyer's perspective, in structuring the transaction.

Diederik: Very good. Thank you both. And thinking about the biggest trade-offs when structuring these deals at origination, Borger, what comes to mind for you? And Ellen, maybe you could respond to that.

Borger: I would say that [00:07:30] the fundamental trade-off is always between flexibility for the issuer on one hand and protection for the bondholders on the other hand. Or to put it more bluntly, flexibility versus pricing, because a tighter structure with stricter covenants and a more comprehensive security package, it gets you a lower interest rate, but on the other hand, it constrains how the business can evolve going forward. So for instance, we [00:08:00] have structures where proceeds from vessel sales must either be reinvested into the fleet or used to redeem bonds. So they may not be used to pay dividends, which is clearly a mechanism that strengthens the protection for the bondholders. As such, it should improve pricing.

And you have a second trade-off also between secured and unsecured, because secured [00:08:30] debt with vessel mortgages, that obviously gives you the lowest coupon, but it will to some extent reduce the flexibility for the rest of your financing platform. And issuing unsecured debt at the local level preserves that flexibility, but it costs more. And issuing unsecured debt would also, to a larger degree, then depend on a predictable debt [00:09:00] serviceability story at the local level.

Ellen: Yeah. And picking up on whether a financing is secured or unsecured, I think one of the trade-offs there is timing and execution risk in a transaction because if it's a large financing and it's secured, in these sectors, it will involve a number of jurisdictions. I mean, we can see anywhere from 5 to more than 20 jurisdictions involved, and taking security [00:09:30] across that landscape is complex, it's time-consuming, it can be very, very costly. I think we had one transaction where we had 750 security agreements in 18 jurisdictions, and you can just imagine what kind of logistical exercise that is. So I think it's extremely important in those types of financings, if you go that route, to involve advisors and agents, which are experienced and speak the same [00:10:00] transaction language to avoid execution risk, basically. Yeah.

Diederik: Thank you, Ellen. Thank you, Borger. Zooming in on the SPV, so what roles would SPVs typically play in aviation and shipping financings, and why are they so central to these structures? Ylva, perhaps over to you, with Ellen give her views as well.

Ylva: Sure. [00:10:30] So SPVs are special purpose vehicles. They're not just legal nice-to-haves in aviation and shipping finance. SPVs are essential to the structuring of finance transactions because they define four important aspects. Number one, the ownership of the asset. Number two, risk allocation or ring-fencing, as I'm sure Ellen will comment on. Three is enforceability, and the forth element is the cash flow mechanics of the deal. [00:11:00] And in global businesses, like aviation and shipping, you will need SPVs in multiple jurisdictions, all with different local law requirements. And of course, it's essential to ensure compliance and good legal standing and corporate governance throughout the entire group structure during the life of the operations.

So at CSC, we regularly assist with SPV formation and administration, like incorporation of a company, [00:11:30] the required registrations and filings, the accounting and payroll, and of course providing directorship services to SPVs across industries, including maritime and aviation.

Ellen: Yeah, that aligns with what we see in our business as well. So I think there are several reasons why SPVs are so prominent in both shipping and aviation, and you touched on it, Ylva. Of course, there's ring-fencing of the [00:12:00] financings. You're able to place a vessel or an aircraft in a separate SPV and thus isolating it from the credit risk of the rest of the group with the standalone financing.

That also ties into enforcement mechanics, where if you have an SPV, it's easy to grant a share pledge over the asset-owning entity, and that gives the lenders optionality in case of an enforcement if you get there. But also, [00:12:30] in advance of an enforcement, you can also step in and control voting rights, for instance. So it gives you the ability to become the shareholder. You can appoint directors. You can collect earnings, etc., rather than taking the asset directly. But what is the best solution depends on the situation at hand.

And then thirdly, of course, if you have SPV financings, it's more flexible with regards to [00:13:00] asset-level financings and also disposals. For a large group, it makes it possible to have different types of financing, different sources, and also to have various maturity profiles, which can be beneficial.

And I think finally, I mean, there are several important factors here, but also for an SPV, it's much easier to provide security over a revenue stream [00:13:30] because you can give security over a contract or the monetary claims under a contract, and also step-in rights, which will allow the creditors to take over operations and continue generating the revenue the asset is supposed to generate.

Diederik: Very good. Thank you. And zooming in on the lenders, right, so how would lenders tend to think about these security packages in these transactions? What actually matters [00:14:00] to them most in practice? And I think this question really is sort of at the center of where your three practices touch. Borger, I'd like to get your views, and then Ellen and Ylva, please respond.

Borger: Yes. So in practice, I would say what matters is what gives you control and recovery quickly in a potential default scenario. So lenders will want to ensure [00:14:30] optionality, enabling them to navigate different situations in order to maximize the recovery. That is why the vessel mortgage and the share pledge in the vessel-owning SPVs really matter because they let you either sell or appropriate the asset directly, or step in and take operational control. So then you become the shareholder, you appoint the directors, and you collect the earnings.

Ellen: [00:15:00] Yes, I obviously agree. It's all about maximizing recovery and being able to do that quite quickly. So in addition to the mortgage, and I guess that goes without saying, the security over insurances are extremely important because that is the substitute for the asset value in case there's damage or a total loss. So the lenders will typically want to review insurance policies and will regulate the insurances quite strictly during the life [00:15:30] of the credit.

Also, we see that lenders will want to protect themselves against any competing creditors, also with regards to the assets that may or may not have substantial value, but just to avoid noise in an enforcement scenario. You just don't want to have to deal with other creditors unless you have to.

And then, as I've already mentioned, of course, a security take-up can be extremely costly. So that's something to think about, [00:16:00] especially in aircraft financings. I think in Norway we have very high registration fees in aviation as opposed to shipping. So that's an issue.

And then, also, I think lenders will want to understand the contracted revenue structure. Like I mentioned, there are very many different revenue structures in these types of financings. But where that is an important element in the financing, then they would want to regulate that and have step-in rights.

[00:16:30] And then, I guess for both sectors, an important issue to be aware of too is the potential for statutory liens. These can be quite substantial. They can restrict the operation of the assets and also have priority before the bondholders' mortgages. So this needs to be diligent, and the risks need to be understood and, where possible, mitigated of course.

I think because of the important security place in these [00:17:00] financings, lenders will want to ensure that you have reputable SPV providers, such as CSC. You want proper corporate governance, and you also want to ensure that agent and security agent have the necessary experience and powers and ability to both enforce but also release security in all the relevant jurisdictions. I think, yeah. I think that's something that, Ylva, maybe you can elaborate on.

Ylva: Of course. Yeah, well, I [00:17:30] mean, security will naturally be the kind of last resort for the lenders. They want their repayments or the coupons. They don't really want the assets. But like you say, in shipping and aviation, the asset is what is generating the cash flow. So as a creditor, you need to make sure that you can step in and either take control of the asset or sell it to get your money back.

And using a professional third party as security trustee has several benefits. One administrative [00:18:00] aspect is it simplifies the registration and release of mortgages, so you don't need to involve the full creditor group. But maybe more importantly, when you have a security trustee, you get arm's-length treatment and you avoid conflicts of interest. Because in default situations, we see from time to time disagreements between creditors, for instance, in a syndicate of banks where they no longer agree on the best course of action, and if you have a [00:18:30] security trustee, you have a neutral third party which will make sure that the agreed procedures are followed.

And I would say also continuity in the security trustee role is important because we do see some structures where the lender acts as trustee and holds security on behalf of itself and a group of creditors. But credit instruments, like bonds and loans, they can be traded, and the lender who sells out of a loan typically does [00:19:00] not want to stay on as agent or trustee. But to step out of the role as securities trustee or agent is quite another matter and not as straightforward as selling your loan participation.

So I would say that's why a solid security structure will often have an independent third party as agent and security trustee rather than a lender. And at CSC, we regularly take on these mandates, and we have the ability to remain in the role regardless of changes in the [00:19:30] lender group, regardless of conflicts in the lender group, and also regardless of changes on the borrower side. We even have some trustee mandates of more than 50 years' tenure.

Diederik: Very good. Thank you all. And what factors influence where these transactions are structured and governed? I think, Ellen, this is right up your alley. So maybe you could respond. Ylva, we'd like to get your views as well.

Ellen: [00:20:00] Sure, sure. I mean, for the governing law of the bond or the credit agreement, I mean, it starts out with the preference of the borrower and the lender, of course. But in the market we're discussing today, which is Nordic bonds, these are going to be governed by Nordic law and then most often Norwegian law because that's what I work with. I mean, this market, it's actually a global crowd of investors and issuers. So it will typically involve multiple [00:20:30] jurisdictions also because of the nature of the assets.

The pros and cons of taking security is a highly relevant factor. And as I mentioned, legal fees, timing, registration, stamp fees, that's important. And you need to compare that against sort of the value of the security in practice and ease of enforcement. Security documents will almost always be governed by local law. So that depends on where the companies and [00:21:00] assets are located or registered. And then, as I mentioned, for aircraft financings, you have the possibility of registering international security pursuant to the Cape Town Convention with the International Registry in Ireland. So that's sort of a little bit of an exemption there.

And then for the jurisdiction of the issuing entity, one of the important factors is that it's a recognized jurisdiction, and we're talking about KYC and sanctions, etc., and also [00:21:30] in a jurisdiction that is sort of well known within that sector. And then, of course, tax will always play an issue in bond financing. So it's important to ensure that there's no withholding tax on coupons. That will always play a factor.

I think also, again, on the revenue streams, where you have the variety of contracts, whether it's commercial airlines or cruise ships, [00:22:00] you can have infrastructure-like contracts with governmental off-takers and charter parties of various durations, fleet contracts, and volatile or nonvolatile spot markets. That will definitely play in.

And then, lastly, I'd say, in larger financings, you can have senior and junior debt. You can have a mix of bank and bond. You can have seller credit, export financing. And there's no end to the [00:22:30] possibilities. So in those cases, you will need to regulate into creditor issues, which can be quite complex.

Ylva: Yeah, I agree. And to just add on to the hubs we see for maritime and aviation structuring and financing is, like Ellen mentioned, of course Ireland, Oslo. We see London, New York, and Singapore for these types of transactions. These are all strong communities that [00:23:00] attract very sophisticated lenders, investors, and advisors from across the globe. And since both aviation and maritime are by nature truly international, you would need to make sure that you have advisors and trustees that have global capabilities and the knowledge and manpower to assist in complex structures wherever the need may arise. For instance, if matters go sideways and you need to actually enforce on, let's say, a vessel mortgage when the vessel is sailing [00:23:30] in foreign waters, or where you have sanctions or the outbreak of a war that prevents trading as usual.

Diederik: Very good. Thank you. Thank you both. And where do structuring decisions made at origination most often create challenges later on in the life cycle of the deal? Borger, could we start with the investment banker's view, and then Ellen as a lawyer and Ylva [00:24:00] as taking up the role of trustee, respond to that please.

Borger: Yes. So I would say there are at least a few recurring patterns that we see. So for instance, we see covenant packages and undertakings that didn't really anticipate how the business ended up evolving. And sometimes that could lead to breaches of maintenance covenants down the road. And secondly, [00:24:30] we sometimes see call schedules that don't really match the refinancing window. And if those call schedules are not properly thought through at the issuance, then the company may end up having to pay expensive call premiums or, even worse, run straight into maturity walls.

And so sort of on a more positive note, we also see permitted distribution clauses that turns out to be [00:25:00] too restrictive, especially in bull markets. So in those cases, you can see companies end up piling up cash on their balance sheet, but shareholders would rather see return.

So I think the general lesson here, from our perspective at least, is that structuring should be done with a clear view of how the business actually operates and how it evolves, and not just [00:25:30] against any generic templates. So understanding the company's business plan over the life of a bond is as important as the drafting of the term sheet itself.

Ellen: Yeah. I agree, Borger, and I think I would add one of the lessons learned from our side is also the lack of protection against other creditors in structuring the financing. So what we have [00:26:00] experienced and hope not to experience, again, is where finance documents have loopholes where you undermine the value of the security, where you allow for creditors to the SPV that you didn't think of. That can be as simple as an intercompany loan. Or you have other loose regulations, which allow the group to restructure itself or take up additional debt, and then, you end up being a secured creditor but still being structurally subordinated. [00:26:30] So that's a lesson learned. Yeah.

Ylva: Yeah, I agree, Ellen, and I would say the challenges certainly arise when deals are structured without clearly regulating these potential diverging interests or with loopholes, as you mentioned, or if you have a lack of overall mechanics for coordinated procedures. So we've seen examples of that in the recent surge of direct lending and private credit in many [00:27:00] instances replacing the traditional syndicated bank loans. So for instance, where a borrower sits with the full flower bouquet of different loans and credits, typically with different terms and covenants and no one to administer the overall compliance and reporting and communications, you could end up in a situation where breach under one agreement typically causes cross-default, and suddenly you have a mess of a situation with a number of different creditors moving against the borrower and the security and potentially [00:27:30] also against each other.

So as a professional agent or trustee, that is where our role is really important, because if at the outset of the financings, the financing has been structured with appropriate agency and trustee mechanics, both the borrowing side and the lender and the investor side will have protection that comes with the independent party having a clearly regulated mandate, which again can facilitate solutions. And these [00:28:00] proper agency and trustee mechanics, they typically make sure that you bring all the parties to the table and follow pre-agreed procedures for decision-making, for default situations, for acceleration, and even foreclosure and enforcement. And in many jurisdictions, a trustee or an agent will also have legal standing to represent the secured parties in a legal proceeding. So in solid financing structures, you will have appointed an agent and trustee with real practical experience [00:28:30] and legal and procedural knowledge.

Diederik: Very good. Thank you all. Now dipping a bit more further into the Nordic bond market, as the Nordic bond market has grown to be the third largest bond market in the world. So what are the characteristics of this market? And what makes it so attractive to sectors, or at least to issuers in the sectors of shipping and aviation? Borger, thoughts?

Borger: [00:29:00] Yes. As you say, the Nordic high yield market has grown tremendously over the recent years. I think it's now close to €70 billion outstanding in the market, and it has become truly international, both in terms of investors and issuers. And as you said, it's now the third largest high yield market in the world, after the U.S. and the Euro bond markets. And last year, we saw around €22 billion [00:29:30] being issued in the Nordic market, with issuers ranging from Australian mining companies to U.S. E&P companies to Norwegian tech companies and Greek shipping companies.

And I would say there are four main reasons why more and more companies, including shipping innovation companies, are choosing the Nordic bond format. Firstly, it's the flexibility. Flexibility [00:30:00] in terms of issue sizes, where the Euro and U.S. bond market, you typically see requirements for at least 300 million issue sizes. While you in the Nordic market and our investor base, we cater for issue sizes ranging all the way from 30 million up towards a billion. And the Nordic market also offers an increased structuring flexibility, ensuring that [00:30:30] terms and structures can be tailored to the company's needs to a larger degree than what you see in the Euro and U.S. bond markets.

It's also easier to do modifications to the bond terms, and waivers are not uncommon, I would say, in this market. In the UK and U.S. markets at least require, require I think it's 75% and 90% majority in order to make amendments. At two-thirds [00:31:00] majority with 50% of bondholders present to vote is sufficient in the Nordic market. So that's the flexibility.

The second point is a swift issuance process and the quick speed of execution, because the whole process from when we initiate the preparations to the company actually receives the fund are typically done in four to eight weeks, I would say. And that's made possible by [00:31:30] light documentation with no requirements for extensive offering memorandums or official credit ratings. There are also no formal due diligence requirements. So you don't need any 10b-5 letters or reliance letters. The only due diligence requirement in this market is a completeness and indemnification statement and a bring-down due diligence call ahead of launch.

[00:32:00] And the third reason I would say is the low cost. The cost of issuing a Nordic bond is significantly lower than what you see in the U.S. and the Euro bond markets. That's mainly due to the lighter documentation requirements, as I mentioned, but it's also that the term sheets in this market are based on the same type of templates. So the cost levels pre-issuance [00:32:30] are low, but the cost levels post-issuance are also low, and they are mainly then surrounding listing and the trustee function.

And last but not least, the investor base in this market has become truly global. And just speaking on behalf of Pareto, we saw 1,800 unique investors in our books last year. They were from, I think, 52 [00:33:00] different countries, and that trend is just accelerating. So far in 2026, for instance, over 80% of our investors are from non-Nordic countries.

And then just finishing up with a shameless Pareto plug, Pareto Securities founded this market, Nordic high yield market, back in the early 2000s, and we have been the leading arranger ever since. So this product is truly the backbone of what we do and what our company can offer. [00:33:30]

Diederik: Ylva, perhaps your thoughts?

Ylva: Sure. So here it's market practice to always use a bond trustee with all the benefits that we've already touched upon. And the mechanics of the bond trustee are clearly set out in the quite light documentation that Borger mentioned. But there is also very established practice around the actual process and practicalities. [00:34:00] So a seasoned bond trustee will always engage early in the process and have a dialogue with the arranger and the legal advisers to make sure that everyone is on the same page and the process and execution runs smoothly. And the same, of course, goes for the communications during the life of the bond with established routines for information sharing, for bondholder meetings and voting.

And due to the attractiveness of the Norwegian bond market for international issuers, we're often [00:34:30] engaged to assist both here in Norway and in other jurisdictions where the issuer operates. So typically it could be issuers based in the U.S. or in Asia with cross-border operations, and they will need our assistance locally, either as bond trustee or security agent, process agent, or as local directors to their SPVs. And due to the global reach of their operations, we will often assist not only with capital markets services but also with [00:35:00] business admin and compliance, fund administration, and domain security and brand protection in the 140 jurisdictions that we cover globally.

Diederik: Ellen, lawyer's perspective on the Nordic bond markets?

Ellen: Yeah. No, I think in addition to both Borger and Ylva's reflections, a key factor for success in the market is that we have a competent professional environment. As Borger and Ylva described, Pareto and some of their [00:35:30] peers have managed to conquer the world with this product, and I like to call them the modern Norwegian Vikings for that. And as a result, the Nordics now have a very competent environment of professionals used to working with these transactions, and that's the managers like Borger at Pareto, you have lawyers in Thommessen, and Ylva with CSC that help to streamline the process, making it very efficient in terms of timing and costs. [00:36:00] So I think that's a key success factor.

Diederik: Very good. Thank you very much. Zooming out a bit more and taking a holistic view, so how early in a transaction would the roles, like a trustee, a security agent, an SPV provider, typically be considered? I think, Ylva, this would sit well with you. Maybe you can start.

Ylva: Of course. Yeah, I mentioned it already. I think that good arrangers and legal advisors will [00:36:30] always consider this early in the structure and also be able to look a bit ahead in terms of the roles as trustee and security agent. Because, you know, for instance, where a borrower has grown from having one or a few bilateral financings, at some point, it would typically make sense to refinance into a platform that allows for even more flexibility and growth, but also ensure predictability and structural robustness. So the financing itself may have a shorter [00:37:00] tenure, but the business of the borrower has a much longer horizon. So you want to build and maintain a structure that can support the borrower throughout several refinancings and withstand the cycles and changes, both expected and unexpected, that will come with international and cross-border operations. So you also want to find a trustee with the required licenses and systems to handle large multi-currency, same-day payments settlements for the transactions. [00:37:30]

Ellen: From a lawyer's perspective, our experience is that it's beneficial to engage the trustee and security agent early on in the process, both to onboard them, make sure they're familiar with the transaction structure, but also I think . . . We had several examples, when working with you as well, that you provide valuable input on the documentation and also on the stages of the of the transaction in the initial planning phase. So yeah, I appreciate that.

Ylva: [00:38:00] Thank you.

Borger: And then, from a manager's perspective, I would say it depends a bit, but typically a bit into the documentation phase, because in the Nordic bond market at least, I would say these roles have become fairly standardized, as described by both Ylva and Ellen, which is again an important factor for why we are able to execute at such [00:38:30] short timelines. So our priority from the offset is always to land the overall structure first and then involve the trustee and security agent later on in the documentation stage.

Diederik: Thanks. Yeah, that makes a lot of sense. I see that we are overrunning quite a bit. So let's move on to the final question. I'd love to get your views, but if you [00:39:00] can keep it short to a couple of lines, that would be much appreciated. So aviation and shipping are obviously different sectors, but question to you is, are there any structuring principles that would apply equally to both? Borger, perhaps you could kick off.

Borger: Yes. I think the answer is yes, because I think the underlying logic here is very similar [00:39:30] because both sectors share the same financing problem. You have high-value, mobile depreciating assets with long economic lives. And they are deployed across borders with credit driven mainly by asset values. And employment is also largely driven by regulatory requirements. So the financing framework for structuring these transactions are largely the same. You ring-fence [00:40:00] the assets in SPVs. You calibrate covenants to the cash flow profiles and the depreciation profiles. And then you build in enough flexibility for the issuer to manage those assets over their economic life. So I would say that if you can structure shipping bonds, then I think the aviation logic is also intuitive and vice versa.

Ellen: Yeah. On the legal side, I'll point to two factors. I think one is defining [00:40:30] the security package, where the similar law or principles will apply and taking into consideration the asset's group structure, jurisdiction, contract structure, etc. And then secondly, both sectors are subject to substantial regulatory requirements, both domestically and internationally. So this requires both players and assets to have a license to operate, so to speak. So it's important to take that into consideration when structuring.

Ylva: [00:41:00] Yeah. And just adding on, not stating the obvious, but both sectors are very asset-heavy and require large amounts of financing, typically from multiple sources. And then both sectors are, by nature, cross-border and require knowledge of financing markets and legal and political risks. And striking that balance between the flexibility and predictability that Borger has mentioned. So to make operations run smoothly, you really depend on working with partners, professionals like [00:41:30] the Pareto and Thommessens of the world that truly understand the challenges that you're facing and that proactively can assist you in quickly solving issues that may arise. So time is money, and you want to use advisors and service providers that can assist you across time zones and across these legal frameworks.

Diederik: Very good. Thank you all very, very much.