Merit AirFinance, L.P., an aviation lending firm specializing in customized debt solutions for airlines and leasing companies, priced an $817 million loan asset-backed securitization (ABS) named MERIT 2026-1 on March 10, 2026. This marks the company’s inaugural issuance under its MERIT shelf registration, advancing its capital markets expansion.
The transaction features $461 million in Class A notes rated AAA by Fitch Ratings and Morningstar DBRS. These notes offer a fixed coupon of 4.852%, yielding 4.9%. Remaining tranches were held by private investors. Proceeds finance a diversified pool of 97 secured aviation loans across 10 facilities and 34 lessees, with a weighted average asset age of 10.8 years and loan maturity of 6.8 years.
At pricing, MERIT 2026-1 secured the second-lowest Class A spread in aviation ABS/CLO history, per bank reports, amid market volatility. This reflects robust investor demand for the seasoned portfolio.
“We are grateful for the robust investor interest in this transaction, especially given the current backdrop of market volatility,” stated Patrick Mahoney, Merit President. He credited the outcome to portfolio quality, diversification, and investor ties.
Since launching in August 2025, Merit has closed or committed $1.3 billion across 11 deals, including six with leasing firms and five with airlines. Its largest, exceeding $350 million, involved a top global lessor. Recent hires include Brian Devenney as Head of Origination, formerly of Perseus and Merx Aviation.