How a German Operating Lease works

A GOL is structured as a sale/ leaseback with an SPV that purchases the equipment from and leases it back to the lessee. The SPV is a Germany-specific structure called a KG that enables the German investors to invest equity on a non-recourse basis. The balance of the purchase price is funded by third party debt with typical leverage of approximately 55-65% of the equipment cost.

Lessees can look to existing debt providers or request their GOL Lessee Advisor to identify appropriate lenders. As with other operating lease structures like the JOL or JOLCO, the GOL provides airlines with financing over longer terms (up to 15 years) at attractive terms.

From the German investor's standpoint, it is an appealing structure providing tax sheltered or cash on cash investments at reasonable returns.

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