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The Convention on International Interests in Mobile Equipment and the associated Aircraft Equipment Protocol (together known as the ‘Cape Town Convention’) were extended to the Cayman Islands by the United Kingdom on November 1 2015. The Cayman Islands made its own declarations under the Cape Town Convention, including the adoption of Alternative A, which is one of the conditions required to comply with the Organisation for Economic Cooperation and Development’s Aircraft Sector Understanding in order to obtain a discount on export credit financing.
The Cayman Islands has long been a hub of the securitisation industry. In keeping with this, recently there has been a growing trend among aircraft operating lessors eager to access the capital markets to securitise portfolios of aircraft in asset-backed securitisation (ABS) transactions using Cayman Islands-incorporated special purpose vehicles. The notes issued by the issuer in these transactions are then listed, and there has been a significant increase in ABS listings on the Cayman Islands Stock Exchange, with its favourable disclosure requirements and listing fee structure.
The Cayman Special Economic Zone (SEZ) recently created the Cayman Aviation Services Park to sit alongside the existing Cayman Maritime Services Park established in 2015. The Special Economic Zones (Cayman Enterprise City) (Amendment) Order 2017 states that the parks are designed to attract maritime and aviation services businesses in order to help establish the Cayman Islands as the largest maritime and aviation services cluster in the region. Businesses may set up operations in the Cayman Islands under the SEZ regime and obtain the benefits and concessions provided by the SEZ.
This article was first published in Lexology.