By Nam Hyun-woo
KTB Investment & Securities made an $85.6 million investment in an airplane, according to industry sources on Monday, coming as the first result in the firm’s bid to be an investment banking specialist.
On Thursday, the brokerage house completed raising a domestic fund to purchase an Airbus A330-300 aircraft run by Singapore Airlines from a Chinese lessor.
Investors will receive interest and principal for six years until the leasing period expires, with an expected annual return of from 3 to 6 percent a year. A number of domestic insurance companies and aid associations reportedly joined the move.
This is coming as KTB Securities’ first overseas alternative investment and the first case in which a Korean securities firm is financing an airplane with a Chinese company.
The investment reportedly was driven by KTB Securities’ new CEO Choi Suk-jong. Choi, who took the post last month, was a former investment banking department chief at Kyobo Securities.
Choi said the company will focus on real estate project financing, structured financing and renewable energy to make revenues from investment banking.
Financing airplanes is garnering keen attention as a subject for stable investment in the domestic financial investment industry. Since airplanes have low price volatility, investors can expect stable leasing costs after they lease the airplanes to airliners.