Jetrader - Summer 2014 - 24

(ECA) guarantees from the Export-Import
Bank of the U.S., or from the value of having aircraft entered into the Ireland-based
International Registry of Mobile Assets
established under Cape Town to record
international property interests in the
covered aircraft equipment.
Currently, along with its lender safeguards, Cape Town's benefits include a fee
discount established by the Organization
for Economic Cooperation and Development
(OECD) in the new Aircraft Sector
Understanding covering a number of ECAs
for ratified countries fully complying with
treaty implementation and appearing on
the OECD's eligible-nation list.
The treaty is also the underpinning
for the burgeoning arena of international
capital markets transactions which, according to Scherer, are expected to comprise a
growing slice of aircraft funding.
"The most significant thing from Cape
Town today is that we are seeing real (international capital markets) deals. It started
with the Emirates transaction in mid2012, but the high-water mark was 2013's
Air Canada international EETC (Enhanced
Equipment Trust Certificate). It was a huge
accomplishment in which everything was
done right, starting with the (credit) rating agencies. It's a model for all of Cape
Town," Scherer said.
The Boeing executive said the Canadian
carrier's efforts encouraged several global
capital markets deals currently underway

and spurred other carriers to think harder
about support for Cape Town ratification in
their home nations if it hasn't yet occurred
or been finalized.
"Cape Town now covers over half the
world's aircraft transactions. This strong
base has allowed it to prove its merits
and gives us confidence that its value to
aircraft investors is significant and enduring," Scherer said.
"Today, Cape Town's benefits are not
theoretical. It is a real, tangible process.
We're at a tipping point and can see a critical mass," Scherer said.
"What will it mean in 2014? We think the
industry will see three to four international
EETC deals this year, and a bigger role for
public debt capital markets transactions as
a percentage of overall aircraft financing,"
Scherer said.

New Cyber Tool
As Cape Town has matured into a prime
example of how transnational commercial
law can benefit complex global transaction, its supporters have rallied behind it
to create a new global platform from which
Cape Town learnings and resources can be
shared and studied.
Recently the Cape Town Academic
Project, an academic collaboration between
two major institutions-the law schools
of Oxford University and the University
of Washington-launched a new website to benefit those looking to research

Cape Town's success as the number of ratifying nations continues to rise.
The project has several components: a comprehensive database on the
Convention, including its legislative history; an annual conference dedicated to
Convention details and developments;
an electronic journal; and preparation of
materials to enhance Cape Town's understanding and teaching.
The new website, www.ctcap.org, contains a searchable Cape Town database of
primary and secondary materials on the
treaty elements including their preparatory
phase, implementation in national law and
their subsequent administrative and judicial reporting; instructional materials and
law and economics assessments materials.
"This site will assist scholars, lawyers,
government officials and commercial parties around the world with readily available
and comprehensive materials on this important treaty," said Jon Eddy, commercial law
professor at the University of Washington,
the project's U.S.-based partner.

Chart 1: Cape Town: A Global Treaty for Global Business

60

Countries ratifying the
treaty through 1Q
2014

54

Countries ratifying the
Aircraft Protocol relating
specifically to aviation

20

Nations whose airlines are
currently eligible for OECD
discount
(Source: Boeing)

24 The ofﬁcial publication of the International Society of Transport Aircraft Trading

International Review -The cover of a printed
copy of the Cape Town Convention Journal
produced by the Cape Town Academic Project
is seen here. The annually produced review
focuses on in-depth, qualitative analysis
of the treaty to assist the work of scholars,
practicing lawyers, judges and others whose
work touches on the treaty and its Aircraft
Protocol. An electronic version of the journal
is available at no cost through the project's
website, www.ctcap.org. ISTAT is among
organizations that have contributed to the
project and showed support for developing
the new website.
http://www.ctcap.org http://www.ctcap.org
Jetrader - Summer 2014

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