Global, aviation-focused alternative investment manager, Castlelake, L.P., has established Itasca Re Limited in Bermuda, a new reinsurance company designed to provide insurance financing solutions to both buyers and owners of commercial aircraft assets.
Castlelake specialises in asset-backed private credit, and has 17 years of experience investing in, financing, and managing aviation assets.
It has created Itasca Re, a Bermuda-licensed reinsurer, to innovate and expand the financing solutions it can offer, as it attempts to enable competitive financing rates for aircraft asset buyers by transferring the non-payment risk traditionally held by financiers to third parties through an insurance policy.
The policies, explains Castlelake, will be issued by Starr Insurance Companies and reinsured by Itasca Re and other potential third-party reinsurers pursuant to a dedicated reinsurance agreement.
The new reinsurer will be led by Kostya Zolotusky, an experienced aviation industry veteran, who most recently led Piiq Risk Partners Ltd.’s Integrated Finance Linked Insurance (IFLI) division. Piiq Risk is an aviation sector focused insurance broker, and will provide exclusive brokerage services to both Starr and Itasca Re.
Joe McConnell, Partner and Deputy Co-chief Investment Officer at Castlelake, commented: “Itasca Re is the latest step Castlelake has taken to strategically innovate and expand the financing solutions it can offer. Itasca Re brings reinsurance support for creative, customizable and cost-efficient insurance-backed products to our airline partners and other buyers and owners of commercial aircraft assets at what we see as a time of high need.”
It’s expected that Bermudian Itasca Re will provide a broad spectrum of insurance-backed risk solutions in the aviation finance sector. The parent explains that this includes servicing airlines and operating lessors looking to purchase or refinance new or vintage aircraft assets, as well as financiers seeking alternative syndication or de-risking options for their loan portfolios.
Further, the new reinsurer’s dedicated focus on aircraft secured financing, and its team’s experience, is expected to enable more nuanced asset-secured insurance financing solutions than what has been available in the current insurance market.
Armin Rothauser, Partner, Asset-backed Direct Lending at Castlelake, said: “With the experience and expertise of the Itasca Re team and partnerships with established market participants, we believe Itasca Re will quickly become a go-to solution provider for global airlines and the broader aviation market.”
Since its inception, Castlelake has invested more than $17 billion in aviation opportunities, acquired over 650 aircraft, and developed relationships with around 200 airlines.
