The Aviation ABS Master Trust

Executive Summary

A New Chapter in Aviation ABS

The aviation ABS market has entered a new phase in global aviation structured finance. As the market continues its post-pandemic recovery, lessors are consolidating, issuance is becoming more frequent, and investor expectations around transparency and consistency have never been higher. For serial issuers, the traditional one-deal-at-a-time aviation ABS structure, effective though it has been, is beginning to evolve into a more efficient Aviation ABS Master Trust model.

The Master Trust Model

An Aviation ABS Master Trust allows multiple issuances of series of notes to be issued from a single platform. Previously, these multiple issuances of series of notes would have been issued from separate structures. In a Master Trust framework, all series of notes share a common legal trust, integrated servicing, and cross-collateralized cash-flow support. The result is a structure built for repeat issuance, operational scale, and long-term platform value—an important innovation in aviation structured finance.

Real-World Proof: AASET 2024-1 and AASET MT-1

In 2024, Carlyle Aviation Partners tested the market for an Aviation ABS Master Trust structure with the AASET 2024-1 transaction, which included 12 aircraft and a pre-identified pool of 8 additional aircraft for future inclusion. Its positive reception led directly to the launch of the AASET MT-1 platform in 2025, which included an initial pool of 23 aircraft and a pre-identified pipeline of over 50 aircraft for subsequent transactions. Within its first six months, the platform completed a successful second transaction adding 23 aircraft and remains open for further issuances. These deals mark a structural milestone for the aviation ABS sector and signal a turning point for serial issuers.

Why It Matters

For issuers, the Master Trust offers streamlined execution, lower costs, and the flexibility to match deal flow with funding needs. For investors, it provides portfolio diversification, asset cross-collateralization, simplified monitoring, and visibility into prior performance across all series. As issuance volumes rise and platforms mature, these advantages become critical in maintaining efficiency and transparency in aviation structured finance.

Looking Ahead

This white paper explores the Aviation ABS Master Trust model through the example of AASET MT-1, its performance to date, and its broader implications for serial issuers for whom the Master Trust may offer a more flexible, scalable approach to aviation asset-backed securitization.

Introduction

Aviation ABS has evolved meaningfully over the past decade within the broader field of aviation structured finance. The market has progressed from traditional lease-backed transactions to more complex aviation loan ABS platforms designed to meet diverse investor appetites and funding objectives. Phoenix American’s previous white papers on the aviation ABS market have explored these developments in detail. The emergence of the Aviation ABS Master Trust marks the next major step in this evolution—a structural innovation purpose-built to support scale, transparency, and repeat issuance in a maturing sector.

This evolution comes at a time of significant transformation across global aviation finance. Following the dislocations of the COVID-19 pandemic and a sustained period of higher interest rates, the aviation ABS market has not only rebounded but recalibrated. Lessors and investors alike have adapted to post-pandemic realities: new patterns of travel demand, tighter financing conditions, and evolving perspectives on aircraft types and lease structures. The result is a more selective, resilient aviation ABS market, with stronger execution reserved for issuers with scale, sophistication, and clarity of strategy.

The AASET MT-1 platform, developed by Carlyle Aviation Partners, exemplifies this new phase. Its foundation on a pre-identified pool of more than seventy aircraft transformed Carlyle’s scale and pipeline visibility, making a Master Trust issuance model both practical and necessary. Similar dynamics are now evident across the industry as platforms pursue growth through acquisition and efficiency through structural innovation.

The numbers confirm the trend. Between June 2024 and July 2025, the aviation ABS market recorded more than ten billion dollars in new issuance, including a growing proportion of transactions from repeat issuers. The depth and diversity of that activity—across aircraft and loan profiles, investor types, and jurisdictions—reflect not only a market in recovery but one entering a more institutional, programmatic phase.

As this shift continues, the Aviation ABS Master Trust offers a critical enabling framework. It allows large-scale issuers to manage securitizations as a platform rather than as a series of isolated programs. It simplifies execution, broadens the investor base, and delivers the operational and reporting consistency that repeat issuance demands. The Master Trust is not a replacement for traditional aviation ABS, but for a certain class of serial issuer, it may represent a better, more scalable way forward.

The Master Trust Structure

In traditional aviation ABS transactions, each securitization is established as its own self-contained legal structure. The collateral is isolated, the debt is ring-fenced, and the documentation and servicing apparatus is rebuilt for each deal. This structure has been successful but can be limited, particularly for serial issuers with growing portfolios and recurring securitization needs within the aviation structured finance market.

The Aviation ABS Master Trust offers a fundamentally different approach. Rather than creating a new trust for every issuance, the Master Trust model establishes a single legal vehicle that can issue multiple series of notes over time. Each issuance, known as a series, is secured by a distinct pool of assets, but all series are backed by the same trust and benefit from cross-collateralization: the cash flows from any assets in the trust are used to support all outstanding note series.

This structural integration provides immediate operational efficiencies and longer-term strategic flexibility for issuers in the aviation ABS market. Once the trust is established, subsequent deals are streamlined. There is no need to set up new SPVs, new legal teams, or new servicing structures. More importantly, issuers can continue adding aircraft and issuing new debt from the same platform, subject to clearly defined eligibility criteria.

While Master Trusts are well established in other securitized asset classes such as auto ABS, their application in aviation ABS is novel. AASET 2024-1 and AASET MT-1 represent a structural breakthrough, adapting a proven model to meet the operational realities of aircraft leasing and modern aviation structured finance.

The first application of this structure in the aviation ABS market was AASET 2024-1, a Master Trust platform launched in 2024 by Carlyle Aviation Partners with Phoenix American as Managing Agent. This was followed in 2025 by the launch of AASET MT-1, also by Carlyle Aviation Partners. In the case of AASET MT-1, the Aviation ABS Master Trust is structured to remain open for two years, during which time the issuer may contribute additional aircraft and issue subsequent series. Aircraft must be pre-identified and meet strict conditions to preserve the credit and performance profile of the Master Trust. They must be on lease, within defined age ranges, within defined remaining lease terms, within defined terms regarding new technology and aircraft type, and associated with strong lessees. New series may only be issued if the overall trust remains in compliance with its debt service coverage and lease utilization covenants, and the assumed repayment date for the subsequent issuance is no later than twelve months from the assumed repayment date of the initial issuance.

Importantly, the Master Trust also simplifies refinancing. Beginning three years after issuance, the issuer may reprice a given series if covenants are met. The repricing must be accompanied by a solicitation process of noteholders and the redemption or transfer of notes held by those who do not consent to the repricing. The change would also be subject to ratings agency approval to ensure continued credit quality and transparency within the aviation ABS market.

From a risk management perspective, the Master Trust offers advantages for both investors and rating agencies within the aviation ABS market. Pooling aircraft across series diversifies lessee, geographic and asset type exposure while cross collateralization helps absorb shocks and preserve recoveries. Performance across the trust is reported consistently by a single managing agent, enhancing transparency and enabling more informed investment decisions in subsequent issuances.

In short, the Master Trust structure is not merely a more efficient version of traditional ABS, it is a new structural model designed to accommodate scale, streamline operations and align investor protection with issuer flexibility. For serial issuers with significant and recurring aircraft portfolios, it offers a better way forward in aviation structured finance.

To ensure consistency across the portfolio, asset additions must conform to defined eligibility criteria as noted above. Such constraints preserve investor confidence across issuances and support cross collateralization integrity.

AASET MT-1

The Master Trust structure is no longer theoretical. Following the successful testing of the market with AASET 2024-1, the aviation industry’s first aircraft ABS Master Trust, Carlyle Aviation launched AASET MT-1 in early 2025. AASET MT-1 has issued two separate issuances of series of notes within its first six months. The AASET MT-1 platform is structured to allow multiple issuances over a two-year window from the initial issuance with pooled collateral and cross collateralized repayment obligations across all series in the aviation ABS market. The trust remains open for further issuances until either the exhaustion of the pool of pre-identified aircraft or with the issuance window closing in February 2027.

Issuance Overview

The 2025-1 initial issuance, which closed in February 2025, included 23 aircraft, comprised of new technology narrowbodies such as the A320neo, A321neo and 737 MAX 8 and one widebody aircraft. The pool had a weighted average age of just 8.8 years and an average remaining lease term of 5.3 years. Aircraft were placed with 17 different lessees across 13 jurisdictions, all on long-term leases and none in default. The series raised $518.3 million across two rated tranches and an E-Note, with risk metrics in line with conventional aviation ABS. Following the issuance of Series 2025-2, the effective LTV on the original Series B-1

The AASET MT-1 platform was designed around a pre-identified pool of aircraft. This pool of aircraft provided the necessary scale and pipeline visibility to justify a multi series issuance strategy and made the Aviation ABS Master Trust format especially well suited to Carlyle’s platform growth goals. With sufficient scale and an identified pool of aircraft, Carlyle was positioned to issue multiple series of notes efficiently without creating a separate structure for each. The Master Trust allows the firm to pool aircraft over time into a single integrated platform with unified servicing, consistent performance reporting and cross collateralized risk sharing across all issuances in aviation structured finance.

The 2025-1 initial issuance, which closed in February 2025, included 23 aircraft, comprised of new technology narrowbodies such as the A320neo, A321neo and 737 MAX 8 and one widebody aircraft. The pool had a weighted average age of just 8.8 years and an average remaining lease term of 5.3 years. Aircraft were placed with 17 different lessees across 13 jurisdictions, all on long term leases and none in default. The series raised $518.3 million across two rated tranches and an E-Note, with risk metrics in line with conventional aviation ABS and consistent with broader aviation structured finance benchmarks. Following the issuance of Series 2025-2, the effective LTV on the original Series B-1 notes rose from 77% to 79%, due to their pari passu ranking with the Series B-2 notes in the waterfall.

The 2025-2 issuance, closed in June 2025, added a further 23 aircraft, bringing the trust total to 46. The additional pool closely mirrored the first in asset quality but also improved the trust’s profile overall. Weighted average age decreased from 8.8 to 8.7 years, weighted average lease term increased from 5.3 to 5.6 years and top three lessee concentration dropped from 32.8% to 30.8%. New technology aircraft now comprise 34.4% of the total portfolio within the Aviation ABS Master Trust structure.

Together, the two issuances draw from a pre-identified pool of more than 70 aircraft, all governed by structural constraints designed to maintain consistency and performance across the trust in the aviation ABS market. Performance-based triggers are central to the structure. AASET MT-1 is administered by Phoenix American, which serves as the Managing Agent for the trust. Its investor reporting role includes consolidated monthly reporting, covenant monitoring and waterfall execution for all issuances, while Carlyle continues as servicer across the platform. This unified approach to operations and transparency exemplifies the potential of the Master Trust model to streamline execution and deliver consistency and clarity for investors over time. Investors in later series benefit from full visibility into the performance, servicing and reporting of earlier issuances, a feature not available in standalone aviation ABS structures.

Each issuance must meet defined thresholds for debt service coverage and lease utilization. Each issuance also included independent liquidity facilities, provided by Natixis for Series 2025-1 and Société Générale for Series 2025-2, sized to nine months of interest. Series B note tranches included six month interest reserve accounts established at each closing. Repricing or refinancing of outstanding notes is permitted following the third anniversary of the initial issuance, provided the trust remains in compliance. The process requires a formal noteholder solicitation and rating agency review, ensuring investor protections while allowing funding costs to be optimized over time within the aviation structured finance framework.

Benefits to Issuers

For issuers with recurring capital markets activity, the Master Trust model offers tangible and repeatable advantages that go well beyond structural elegance. By consolidating infrastructure, standardizing execution and streamlining investor reporting, the Master Trust unlocks a level of operational and financial efficiency unavailable in traditional ABS.

Cost Savings

The most immediate benefit is cost. In conventional aviation ABS, each new deal requires a full reset: new legal entities, new documentation, new servicing mechanics and parallel administrative infrastructure. Legal, rating, trustee and associated fees compound with every issuance. By contrast, a Master Trust
creates a single legal platform with repeatable mechanics, enabling new series to be issued without reestablishing the full suite of support functions. For serial issuers planning multiple deals over time, saving on these costs can be material, especially in a rising-rate environment or a tight equity capital context.

Operational Simplicity

Beyond cost, the Master Trust model reduces operational burden. With a single trust, there is no need to create and manage multiple SPVs, boards of directors or overlapping trustee relationships. Investor reporting and waterfall execution is conducted by a single managing agent, Phoenix American, using a
consistent platform across all series. This standardization extends to monthly reporting, covenant tracking and investor communication, eliminating redundancy and creating a more transparent experience for noteholders and sponsors alike. The unified trust structure also simplifies audits, regulatory compliance and internal oversight for Issuers managing multiple portfolios or platforms.

Strategic Flexibility

Perhaps the most valuable benefit is strategic flexibility. The Master Trust is structured to remain open for a defined period (two years in the case of AASET MT-1), allowing issuers to bring multiple series to market based on opportunity and market conditions. This is especially useful when portfolio
composition is known in advance but market timing is uncertain. All aircraft must meet clearly defined eligibility criteria – including age, lease profile, and lessee quality – but issuers are not constrained by the rigid timing and one-time nature of conventional ABS structures. Issuers also gain valuable funding optionality through the ability to reprice outstanding notes three years after the initial issuance, provided trust-level performance tests are satisfied. This feature allows sponsors to reduce their cost of capital over time without reassembling a new structure.

Platform Scalability

Finally, the Master Trust enables scale. While traditional aviation ABS structures generally top out at 30 to 35 aircraft, the Master Trust can support 40 to 60 aircraft or more across multiple issuances. This broader platform increases lessee, geographic and asset diversification, enhancing ratings stability and investor appeal while preserving a unified credit and performance narrative across issuances.

Benefits to Investors

While the Master Trust structure offers significant advantages to issuers, it also introduces a range of meaningful benefits for investors – particularly those participating across multiple issuances. By enhancing diversification, transparency and oversight, the Master Trust aligns structural innovation
with investor protection.

Cross-Collateralization and Risk Mitigation

Perhaps the most important structural feature from an investor perspective is cross-collateralization. In a Master Trust, cash flows from any aircraft in the trust can be used to support any series of outstanding notes, provided performance triggers are met. This interconnection reduces exposure to individual aircraft or lessee performance. Compared to standalone ABS structures, where each pool must stand on its own, the Master Trust offers a broader platform for risk sharing and recovery.

Transparency Across Series

Because all series are issued from the same legal trust, performance data is unified across the platform. Monthly reporting, covenant monitoring and waterfall execution are administered by a single managing agent, providing consistent documentation and a consolidated view of trust performance. For investors participating in later series, this allows for due diligence based not just on initial assumptions, but on the actual performance history of earlier tranches. In the case of AASET MT-1, investors in Series 2025-2 had full visibility into the servicing, default activity, lease status and credit metrics of Series 2025-1 – a dynamic that is not possible in standalone ABS.

Simplified Monitoring and Documentation

Tracking performance across a traditional ABS platform typically requires investors to navigate multiple deals, indentures, trustee reports and servicing platforms. The Master Trust consolidates these into a single trust with standardized documentation and reporting formats. Investors no longer
need to reconcile divergent templates or monitor unrelated vehicles. This structural clarity enhances both day-to-day monitoring and long-term portfolio management.

Diversification and Credit Stability

The ability to scale the trust across multiple series creates a naturally diversified asset pool. As of August 2025, AASET MT-1 included 46 aircraft with leases to 26 lessees across 18 countries and portfolio metrics improved with the addition of Series 2025-2: average lease term lengthened, average age declined and lessee concentration dropped. This progressive improvement is by design. The trust agreement imposes conditions on each new issuance to ensure that new aircraft do not dilute the credit quality of the overall pool. The result is a dynamically maintained performance profile, where asset additions must meet or exceed existing standards to protect all noteholders.

Investor Protections Remain Intact

Even as the trust gains flexibility and scale, investor protections are preserved through a layered approach:

• Liquidity facilities are established independently for each series (e.g., In AASET MT-1 Natixis for Series 2025-1 and Société Générale for Series
  2025-2), ensuring resilience in the event of payment delays.
• Repricing provisions, while available to the issuer after year three anniversary of the initial issuance, require noteholder consent and rating agency
  review, maintaining a high bar for any changes that might impact investor returns.

In sum, the Master Trust structure is not only efficient, it is intentionally designed to build investor confidence through transparency, diversification and enforceable safeguards. For investors seeking exposure to aircraft ABS in a recovering sector, it offers a more scalable and intelligent way to deploy capital.

Issuer Perspective

John Logan – Managing Director – Head of Portfolio & Fund Management, Carlyle Aviation Partners

The Master Trust structure has allowed Carlyle Aviation Partners (“Carlyle Aviation”) to put more efficient financing in place, while simultaneously providing investors with a more diversified collateral pool. To develop this structure, the Carlyle Aviation team borrowed existing concepts from other asset classes that had never been used with aviation assets. In the initial AASET 2024-1 issuance, the team pre-defined a list of eight aircraft that could be added to the pool at a later stage. This proved popular with investors, many of whom elected to participate in the second add-on issuance.

Carlyle Aviation took this a step further during the launch of AASET 2025-1. Prior to bringing this transaction to market, the team coordinated with its banking and legal advisors and met investors in person to ensure the proposed structure could achieve the group’s collective objectives. AASET 2025-1 launched successfully with the framework in place, allowing future issuances from a predefined list of assets. Investors liked the diversification that subsequent issuances could bring, as well as the guardrails that were in place to ensure that future aircraft would either improve or maintain key portfolio metrics, such as age, lease term and structure credit ratings. Following the success of this issuance, AASET 2025-2 was added to AASET 2025-1, creating “AASET MT-1”. This second issuance demonstrated proof of concept, whereby eligible assets were added, metrics were improved, and overall concentrations were reduced. These enhancements ultimately led to attractive pricing levels.

More generally from an issuer’s standpoint, the Master Trust structure also allows operational and cost efficiencies that ultimately improve investors’ returns. Costs savings can be achieved in upfront set-up costs and ongoing facility management, as well as required auditing and rating agencies. Moreover, a singular structure creates economies of scale from a reporting and internal management standpoint. Carlyle Aviation hopes that the Master Trust technology continues to develop and anticipates being at the forefront of that innovation with future issuances over time.

Application for Future Issuers

The Master Trust model is not a one-size-fits-all solution. It is best suited to lessors and platforms that expect to complete multiple securitizations over a defined period – particularly those with access to a sizable, forward-visible fleet. For issuers planning three or more ABS deals within 24 months, the Master Trust structure can offer meaningful advantages in cost, time and flexibility.

Critically, the model favors organizations with pre-identified aircraft portfolios. Carlyle’s AASET MT-1 platform was built on a pre-identified pool of 70 plus aircraft, with 46 aircraft from that pool included in its first two issuances. This kind of portfolio certainty enables tighter alignment with investor expectations and structural integrity across issuances.

That said, future adopters do not need to have every aircraft in-hand. What is required are robust structural constraints to ensure consistency across the trust, regardless of when or how new aircraft are added. These constraints may include:

• Maximum average age thresholds
• Minimum remaining lease terms
• Specific credit quality standards for lessees
• Limits on aircraft types (e.g., narrowbody vs. widebody)
• Required percentage of new-technology aircraft

Such parameters must be codified in the Master Trust documentation and adhered to across all issuances. This ensures that later issuances do not dilute the quality or creditworthiness of the overall pool, protecting both current and future noteholders. Importantly, these structural rules help maintain transparency and continuity for investors – one of the key differentiators of the Master Trust format.

While Carlyle was the first to implement this model in aviation ABS, the approach is not without precedent. Similar structures are common in auto and equipment ABS, particularly among high-volume issuers with consistent origination pipelines. As consolidation continues across the aircraft
leasing space, other lessors may find themselves in a position similar to Carlyle’s – holding a large fleet with a multi-year securitization plan. For these firms, a Master Trust could offer the optimal vehicle.

Adopting the structure will still require thoughtful planning, including early engagement with investors, rating agencies, legal counsel and liquidity providers. Managing agent selection is also a critical component, as a single party will be responsible for consolidated waterfall execution, compliance
tracking and investor reporting across all series.

Ultimately, the Master Trust model is a fit-for-purpose tool. It is not suitable for every issuer, but for those with sufficient volume, portfolio clarity, and execution discipline, it offers a path to more efficient capital markets access. As market familiarity grows and execution proof points accumulate, more
issuers may find that this “next evolution” in aviation ABS is also a logical next step for them.

A Smarter Way Forward

The Master Trust structure represents a meaningful evolution in aviation ABS – purpose-built for scale, efficiency and sustained issuance. By replacing the one-deal-one-structure model with an open, flexible platform, it enables repeat issuers to consolidate execution, streamline operations, and enhance transparency across multiple deals.

The early success of the AASET MT-1 platform has shown that this model is not only viable but advantageous for issuers seeking operational leverage, for investors demanding visibility and diversification and for the market as a whole as it adapts to a higher-volume environment.

This is not a theoretical framework or one-off experiment. It is a practical, proven solution for issuers with meaningful deal flow and pre-identified portfolios. Where traditional ABS created silos, the Master Trust builds bridges – linking past, present and future issuances in a single, coherent structure with shared standards and integrated oversight.

For aviation lessors with serial issuance needs, the message is clear: a Master Trust platform is worth serious consideration. When the fundamentals are in place – portfolio scale, deal frequency and structural discipline – the benefits are real, repeatable and increasingly hard to ignore.

Robert Cassidy
Director, PAFS Ireland, Ltd.
Rob is a Director with PAFS Ireland, Ltd. Mr. Cassidy joined the Phoenix American group of companies in 2014. He has extensive aviation finance experience and has worked on multiple ABS deals. He is a chartered accountant and a member of Chartered Accountants Ireland. He received his accountancy training at Deloitte, Dublin. Mr. Cassidy graduated with honors with a B.A. in accounting and finance from Dublin City University

Joseph Horgan
Senior Vice President, Phoenix American, Director, PAFS Ireland, Ltd.
Joe is the Senior Vice President of Phoenix American Financial Services, Inc. and Director of PAFS Ireland Ltd. Mr. Horgan has been with the Phoenix American group of companies since 1998. He is responsible for overseeing the management of accounting, financial reporting, cash management, and administration. He is also in charge of reporting to the boards of various aviation clients. Prior to joining Phoenix American, Mr. Horgan was an auditor with Price Waterhouse, LLP. Mr. Horgan received a B.S. in business administration with an emphasis in accounting from California State University, Chico, and is a Certified Public Accountant (CPA).

John McInerney
Managing Director, PAFS Ireland, Ltd.
John is the Managing Director of PAFS Ireland, Ltd., Phoenix American’s Irish
operations based in Shannon, Ireland. Mr. McInerney has served within the Phoenix American group of companies in various roles since 2008, taking on increasing responsibilities within the fast-growing business and helping propel the company to the status of Premier Provider of Managing Agent Services to the aircraft asset-backed securities industry. Prior to joining Phoenix American, Mr. McInerney worked with PricewaterhouseCoopers in Dublin and Boston. Mr. McInerney is a Fellow Chartered Accountant (FCA) and holds a bachelor’s degree in commerce and a master’s degree in accounting from the National University of Ireland, Galway.

John Logan
Managing Director, Head of Portfolio & Fund Management.
Carlyle Aviation Partners
John Logan is a Managing Director, Head of Portfolio & Fund Management at Carlyle Aviation Partners. He is based in Dublin, Ireland. Mr. Logan began his career at Apollo Aviation (the predecessor to Carlyle Aviation Partners) as a Pricing Analyst in 2011. In his current role, Mr. Logan leads the Portfolio & Fund Management group, which is responsible for managing the owned aircraft across Carlyle Aviation’s funds, as well as analyzing new liability structures and overseeing existing ones. Mr. Logan has a BSc in Economics and Finance and a Higher Diploma in Actuarial Science from University College Dublin, as well as an MSc in Finance from UCD’s Michael Smurfit Graduate Business School.