Residual Value Guaranty
Aircraft & Other Assets

Product Summary
HCCIG provides residual value guarantees (‘RVG’) on commercial passenger and freight aircraft.

Generally RVG is used to:

• Increase financial leverage to the borrower by reducing the loan debt service and/or reducing the lease constant
• Eliminate lender’s/investor’s balloon refinance risk
• Guaranty equity investors a minimum return
• Achieve operating/capital lease accounting treatment for the lessee and/or lessor

Overview of Terms of Coverage

Eligible Aircraft for RVG

• Wide-body, narrow body and regional jets will be considered

• No more than 5 years old at policy inception date

Term of Coverage

• No minimum term required

• Preferred length of coverage is 12 years or less

Amount of Guaranty

• Typical guaranty ranges of 20% to 40% of current value or 50% to 100% of ACS

• RVG pricing varies depending on the attachment point, amount of insurance and portfolio diversification

Aircraft Return Conditions

• In compliance with terms contained in the lease but special conditions can be added

• Typically 1/2 life but full life and other conditions are available