Private credit specialist Castlelake has launched Merit AirFinance, a dedicated aviation lending platform with over $1.8bn in initial capital, targeting debt financing for airlines and aircraft leasing companies, according to a report by Bloomberg.
The move expands Castlelake’s footprint in aviation credit at a time when traditional lenders are scaling back.
The platform will be led by Patrick Mahoney, who has been with Castlelake since 2017 and most recently served as head of aviation capital markets. Merit AirFinance will focus on providing financing for both new and used aircraft, complementing Castlelake’s existing role as a major aviation lessor while maintaining operational separation between the two businesses. Since 2020, Castlelake has deployed more than $5bn in aviation debt, with plans to grow further amid tightening bank credit conditions.
Mahoney’s former role will be taken over by Jakob Gallagher, ex-head of capital markets at Wings Capital Partners, who joined Castlelake in July. The launch comes as the aviation asset-backed securities market shows renewed activity in 2024 after a post-Ukraine war freeze, with a wave of aircraft lease securitisations returning to market.
