Share Name Share Symbol Market Type Share ISIN Share Description
Amedeo Air Four Plus Limited LSE:AA4 London Ordinary Share GG00BMZQ5R81 RED ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 40.00 39.50 40.50 40.00 40.00 40.00 127,166 08:00:15
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Industrial Transportation 190.0 24.7 6.1 6.6 139

Amedeo Air Four Plus Share Discussion Threads

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Manager comment;

The DNA companies statements highlight:

There are still several years on the Company's outstanding lease duration and ongoing lease payments which are unaffected by this announcement.
The Company's leases benefit from full life return conditions (and compensation clauses).
That the Asset Manager has been and will continue to be in regular dialogue with Emirates.
The A380 remains intensely popular with passengers.
The Company's debt structure is such that all loan liabilities will be fully paid off at lease end (subject to the continued solvency of Emirates Airlines) at which point the aircraft will be unencumbered.

Doric comments:

"We note that Airbus will be delivering a further 14 A380s to Emirates, and 3 to All Nippon Airways before they close production in 2021. At that time, 251 A380s will have been manufactured. Emirates will have received 123 of these, instead of the 178 (162 firm and 16 options) they had originally ordered. His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group stated, "For us, the A380 is a wonderful aircraft loved by our customers and our crew. It is a differentiator for Emirates. ..... The A380 will remain a pillar of our fleet well into the 2030s."

?We also note that other customers have expressed interest in second-hand A380s, and other airlines dealing with slot-constrained airports may well turn to the pool of A380s. With a finite number of A380s available, this could well prove supportive of the secondary market."

Amedeo comments:

"Amedeo considers today's Airbus announcement to have positive implications for the future values of the installed A380 fleet, particularly those aircraft operated by Emirates.

We estimate that the long-term core Emirates A380 fleet will comprise in excess of 100 A380 units, which we expect will continue to be operated by Emirates for the entirety of their useful economic lives.

We expect the A380 to remain a core aircraft type for Emirates, with higher financial profitability deriving from the longer term use of its A380 fleet. This will act to reduce future capital expenditure, depreciation and rental expenses significantly, whilst retaining the A380's unit cost advantage of scale and unrivalled customer experience."

Yep, market is finally catching up here.

Just to be clear, of the five listed leasing outfits mentioned above, DPA (DP Aircraft 1) does NOT have any A380s. Their portfolio consists of 4 Boeing 787-8 aircraft which is an aircraft still very much in demand.


Airbus to end production of A380s


Airbus has announced it will end production of the A380 aircraft following the decision by Emirates to cut its orders for the aircraft from 162 to 123. Airbus stated it had no substantial order backlog as a result and deliveries will stop in 2021.

Emirates is the major customer for the A380. Prior to the cut, it accounted for 162 of the 313 orders for A380 aircraft. 234 A380s have been delivered to date and there are 15 operators of the aircraft. Emirates is buying more of the smaller widebodies (40 A330-900 and 30 A350-900 aircraft), maintaining the market trend towards smaller aircraft than the large widebodies.

Liberum view

The decision will be a major concern for the listed aircraft leasing funds as the Airbus A380 is the dominant aircraft in most of the portfolios. Doric Nimrod Air One, Two and Three have invested solely in the A380. It also accounts for 69% of the acquisition cost of the fleet acquired by Amedeo Air Four Plus.

Overview of listed aircraft leasing funds

Doric Nimrod Air One

Doric Nimrod Air Two

Doric Nimrod Air Three

Amedeo Air Four Plus

DP Aircraft I







Date of Launch






Market Cap (£m)






Prem / (Disc) to last published NAV






Prem / (Disc) to live NAV (FX-adjusted)






Target Yield (issue price)






Dividend Yield (current price)







1 Airbus A380

7 Airbus A380s

4 Airbus A380s

8 Airbus A380s,

2 Boeing 777s,

4 Airbus A350s

4 Boeing 787s





Emirates, Etihad,

Thai Airways


Thai Airways

Year of lease expiry






Return condition






LTV at acquisition












FX Risk

Yes - residual value

Yes - residual value

Yes - residual value

Yes - residual value

Yes - USD listing

Source: Liberum estimates, Company data

Residual value uncertainty has always been the key risk for the London-listed funds given their focus on the A380. The A380 is used by a small number of operators and does not have an established secondary market. We believe it is highly unlikely the funds will achieve the latest appraised values at the end of the respective leases. The funds publish the residual value estimates on an annual basis with the next due in the results for the year to March 2019. The appraisers have slightly reduced the original residual value estimates over recent years (DNA -8.2% since acquisition, DNA2 -9.6%, DNA3 -12.8%).

We show the IRR estimates of the funds on the basis of the current price, expected dividend payments over the remaining terms of the lease and the latest appraised values as disclosed by each of the funds. Our stressed case leaves income returns unchanged and assumes a 50% reduction in residual value estimates for the A380s (and leave AA4's other aircraft at the appraised residual value). In our worst case scenario, the income returns are unchanged and reduce the residual values of the A380s to the sum of 10% of acquisition cost and the return condition payments under the respective leases.

Why would Amedeo still have an outstanding order for 20 A380s when demand is falling away so rapidly. If I recall correctly Emirates reduced their order recently. Surely this cannot be good for the long term prospects for the AA4 share price
joan of arc
A good chunk of the NAV here is the implied residual value of the aircraft at the end of the lease period. I recently sold my holding because 8 of the 14 aircraft are A380s and the future for the A380 just doesn't look good.

Following is just the latest in a series of setbacks.....

Australia's Qantas Airways Ltd. (QAN.AU ) will formally cancel an order for eight more Airbus SE (AIR.FR) A380 superjumbos that the carrier had long signaled it wouldn't introduce into service. The move further shrinks the Airbus backlog of orders for its struggling flagship plane, and comes days after Airbus said it was in talks with Emirates Airline--the biggest A380 buyer--over existing contracts for the plane, raising the prospect that the Dubai-based carrier may trim its commitment. Emirates had no comment.

The cancellation leaves Airbus with a backlog of fewer than 80 of its A380s, most of them with Emirates. That includes an order for 20 A380s from lessor Amedeo, which hasn't placed the planes or fixed a delivery plan. Airbus in December formally erased from its order book an order for 10 A380s from an undisclosed buyer.

Amid weak demand, Airbus has repeatedly slashed production plans for the double-decker plane. It delivered only 12 last year and plans to further lower output to six planes a year.

...extracts from Aer Cap’s conference call before the new year.

· Mid Life – “I would like to highlight, however, that we do not believe that newer aircraft are always better. It is far more nuanced than that. You have to make sure that you have the new aircraft that your customers want for the next 20 to 25 years, not just the next 8 to 10. We have been very careful with our portfolio management strategy to ensure that we only have the most in-demand aircraft and that age is a secondary consideration. There were plenty of excellent older aircraft just like there were new aircraft that we would not purchase today. The average age of our current technology aircraft is over 10 years and we are very confident that these aircraft will be in demand for the next 12 years, thereby consuming the remaining economic value and reducing any impairment risk.”

· Airline performance – “At a macro level, we see a generally healthy environment for airlines notwithstanding the recent increase in oil prices. We continue to see solid demand for good aircraft. We have now placed over 90% of our order book to 2020. The three major markets of Europe, North America and China continue to perform well.”

· Bankruptcies “I think rising fuel has an impact on all carriers, be they LCCs, full service carriers or charter operators. They have an impact. What I would say though is that the industry is in a better place than it was 10 years ago on a global basis to cope with this. And so far it has to be stressed that we have not seen a significant wave of bankruptcies. We’ve seen small guys. We have not seen an inability to place our airplanes. So the major markets of the world in North America, Europe and domestic China are still extremely strong and we are continuing to place airplanes. The key, Jamie, is to make sure that you have aircraft that your customers want and that’s where the consistent portfolio strategy will pay dividends as well.”

· Bankruptcies (2)

o Kristine Liwag – “Good morning, guys. Gus, following up on your comments that some airlines may struggle this winter, can you quantify how much of your business is at risk and how many airlines and aircraft are in your watch list?”

o Aengus Kelly - “Kristine, nothing out of the ordinary. For the last 12 years it’s averaged 1% on lease revenue. And will it be less than that this year? It’s hard to say. But nothing out of the ordinary, Kristine. I want to stress that.”

· Redeploying aircraft :

o Gary Liebowitz – “And just one more quick one. On average, how many months does it take for you to get your former Air Berlin and Monarch claims back into revenue generating service? And would that be a good revenue number? Is that a good proxy for your Primera narrowbodies?”

o Aengus Kelly – “No, because narrowbodies move much faster, Gary, because you’re not reconfiguring the interiors. In Air Berlin you had quite a number of A330s, so you’re doing more time on reconfiguring those airplanes. But it can be a mix. So some of them move very quickly, some of them took a bit longer, four or five months and one of them took over six months. But on the narrowbodies they tend to move much faster.”

· Airlines extending leases on expiry – “So the extensions have been – the percentage of extensions has been higher, Kristine. I think it’s around 70% now as we look at it and previously had been closer to 50%. So we have seen that going up over the last year or two.”

These are blissfully unmoved after the panic in Prefs today.
Good news from Emirates, I think. Could be doubled-edged. Encouraging they still have faith in the big bird but does it shorten the useful life of the existing aircraft in the four companies?
Interesting post. Do Jefferies have a business relationship with Nimrod/Amedeo? Let's hope other parties take the same view as Dna3 in particular seems to have been in the doldrums since Singapore returned one of their 380s.
Brief note written by Mark Ambrose at Jefferies on the DNA vehicles and in particular on DNA3.

Doric Nimrod Air Three (DNA3 LN, £212m m/cap, px = 96.5p, 7.4% discount)

Background: DNA3 was created to provide a long-term, stable income stream to investors, as well as the potential for capital appreciation, by purchasing and subsequently leasing four A380 aircraft to Emirates for twelve years.

Investment case/key catalyst: Uncertainty over residual values has always been the key risk with these funds. However, in our view the market can sometimes overreact to negative newsflow. Even assuming significant haircuts to the latest residual value estimates, DNA3 can still offer attractive returns.

DNA3’s recent fall was triggered by two pieces of A380 newsflow: Singapore Airline’s decision not to renew its lease on the first A380 and that aircraft owner’s failure, so far, to find a new lessee/owner; and shock, when a widely-expected large A380 order was not announced by Emirates’ at the Dubai Airshow. Emirates’ CEO later said the airline would not rule out buying more A380s, but needed firm assurances from Airbus that it would keep production of the aircraft going.

If anything Emirates’ insistence on some guarantee of the A380’s future only demonstrates its importance to Emirates’ business model. This, to us, suggests that if Airbus ceases production, demand for used A380’s – especially those already kitted out for Emirates’ needs and whose flying/maintenance history is well-known to Emirates – should only increase.

Other drivers: The leases are structured with two components: a GBP tranche funds the payment of dividends to DNA3 shareholders; the USD tranche is used to pay down the fully-amortizing debt prior to the end of the leases. FX risk is therefore eliminated other than for the residual value of the aircraft, which a USD asset.

There is a misconception that DNA3 and its sister funds trade at a significant premium to NAV. In fact this is due to a quirk of accounting that treats the aircraft as GBP assets but the associated debt as USD liabilities. This wrongly creates the impression of a large FX mismatch. Correcting this, we estimate DNA3 is actually trading at a 7.4% discount to NAV (assuming the latest appraisal values).

Valuation: On DNA3’s appraisal value (c.50% of cost price after 12 years) the current share price implies an IRR of 14.5%. Even assuming a halving of the residual value from the appraisal agents’ latest estimates, the current share price still offers a high single-digit IRR, much of which is represented by dividends funded by Emirates’ lease payments.

Viewed instead as a bond, DNA3 currently pays a coupon (dividend yield) of 8.5% which is backed by Emirates’ creditworthiness, and the principal (current share price) is covered so long as the aircraft are sold for 29% of cost – a 44% haircut to the latest appraisal value.

Ah ha, cheers Riff.

Interesting character.

Who is this Marc Gordon out of interest?
Nimrod Capital has closed the placing of a further c.135 million new shares (£140 million) for Amedeo Air Four Plus Limited (AA4) in order to purchase three new Airbus A350s leased to Thai Airways. This transaction brings the market capitalisation of the LSE listed company to over £625 million. The placing was significantly oversubscribed and, in addition to being supported by existing investors, introduced a wide range of new shareholders to AA4.

It is anticipated that the new shares will be entitled to the next target quarterly dividend of 2.0625p to be paid next month. AA4 continues to target an annual distribution of 8.25p (2.0625p quarterly), representing a yield of c.8% based on the 104 pence placing price.

AA4 listed in May 2015 and has increased in size by over £425 million through various issues of shares, the proceeds of which have been deployed to diversify the portfolio by aircraft model and airline. The new issue will be used alongside debt to purchase three new Airbus A350 aircraft leased to Thai Airways, the first of which is expected to be delivered early next month. A fourth A350 delivery (also on lease to Thai) is anticipated early next year by which point AA4 will then own fourteen aircraft in total; Airbus A380s, A350s and Boeing 777s leased to Emirates, Etihad and Thai.

AA4 follows the launch by Nimrod Capital of three listed aircraft companies, Doric Nimrod Air One (“DNA”), Doric Nimrod Air Two (“DNA2”) and Doric Nimrod Air Three (“DNA3”), and these four quoted companies now represent a total market capitalisation of over £1.3 billion following the latest AA4 placing. All these aircraft investment companies have flown smoothly through the turbulence of markets, with AA4 returning some 21% since launch, or an annualised 9.9% (source: Bloomberg).

AA4 continues the model of an investment that has thus far proven to be very successful for UK investors, as it has been for many years too in Europe. The company’s investment strategy can be viewed as a property or even an infrastructure-type deal: in the case of AA4 it will have purchased A380s, B777s and A350s all leased to high quality airlines each for a period of 12 years under fixed non-cancellable leases. Under the terms of each lease, the airline is responsible for insurance and all other service, maintenance and repair costs.

The investors in AA4 comprise, amongst others, institutional asset managers, pension schemes, and private wealth managers, who have been looking for high income investments which pay regular dividends and are backed by real assets which might also provide a hedge against inflation.

The market makers are Canaccord, Jefferies, Numis, Shore Capital and Winterflood, the ISIN and SEDOL numbers are GG00BWC53H48 and respectively BWC53H4 (London listing), and the LSE code is AA4.

If you would like more information please contact us.

Kind Regards

Marc Gordon

Marc Gordon
DDI: + 44 207 382 4560 | Mob: + 44 7785 297620 | Tel: + 44 207 382 4565 | Fax: +44 207 628 7548
Nimrod Capital LLP, 3 St Helen’s Place, London EC3A 6AB

Emirates announced their full year results to end March 2017 today and enclosed below is the release as well as the links to both the summary and full year annual report and accounts. As you can see while profits are down passenger traffic increased as did capacity, the Emirates’ Chairman refers to the resilience of their operations and their increased investment for the future. In terms of the DNA/AA4 vehicles the airline continues to perform in line with its obligations under the rental leases and shareholders are benefitting from the approximate 8% current yield based on current share price derived from the quarterly dividends. If you would like more details please let us know.

The link to the press release in Emirates’ media center:


Download link for the complete annual report:


Any reason behind the relative underperformance "total return wise" of DNA3?

Only taken a cursory glance - decent yields last time I looked but ongoing concern surely at "resale value of planes" and very dependent on one customer, Emirates.

Am a big fan though.

Not looked at Amadeo 4 - they did a 125m share placing, priced at 104p today, presumably to pay for an acquisition.

Marben100 is the expert though.

Cheers for the update

A reminder to all investors that the DNA/AA4 companies all declared their quarterly dividends this week as well as releasing their quarterly fact sheets. They do provide some interesting reading on the aviation market as well as on the detailed aspects of each portfolio. They all highlight in addition the potential benefit to investors of the current levels of sterling if the currency were to remain at the current exchange rate if the respective planes were to be sold at the end of their leases.

The shares will go ex-dividend next week on 19th January and dividends will be paid by the end of January. At the time of writing all the DNA/AA4 companies are on annual running yields of on or around 8%. Below updated performance figures, continuing to show the benefit of the high yield constantly generated, and a recent quote by Fabrice Bregier at Airbus (Travel Weekly Asia / January 12, 2017):

Fabrice Bregier, president of Airbus commercial aircraft, said he was certain the superjumbo’s time would come. “There is no doubt the market is soft at the moment but it is a matter of timing.
"Some 10% of the passengers going through London Heathrow are on the A380," Bregier said. "What I have to accept is the very slow commercial performance we have with the A380. But there is a future with this aircraft: more airports will become like Heathrow with congestion and this aircraft will have a bigger market share.”

Fund Launch Date




Capital Gain
Total Return1




Annualised Return

As at 12 Jan 2017; Source Bloomberg.

The factsheets are available at the respective websites:

or please ask Chris Holland (

As an explanation that is all very well, but it rather misses the point that these companies should have had the US dollar as their functional currency (in line with most other aircraft leasing companies).

Had that been the case there would not have been an sterling translation accounting mis-match with the asset translated at historic rate and borrwings at rate at reporting date.

The company should adopt accounting policies that assist the user in understanding the accounts not making them more opaque.

Nov 14 commentary;
You will have seen the publication of the AA4 half yearly accounts report this morning, and it will be followed by the DNA, DNA2 and DNA3 reports. We thought it worth reminding investors about the structure of these companies as far as the “net asset value” figure reported. The NAV is based on IFRS rules which paint a picture that in the opinion of the Companies' Boards, has little bearing on the economic reality of the “NAV” and so is not a relevant indicator of the net asset value, nor of the profit and loss account. As the Chairman’s statements say:

“International Financial Reporting Standards require that transactions denominated in US Dollars (including, most importantly, the cost of the aircraft) are translated into Sterling at the exchange rate ruling at the date of the transaction whilst monetary items (principally the outstanding borrowings) are translated at the rate prevailing on the reporting date. The resultant variations may sometimes produce very large mismatches and these are reported in the Consolidated Statement of Cash Flows as unrealised foreign exchange movements.”

As investors are aware the equity for the planes is raised in sterling and then converted at the exchange rate at the time of the purchase of the plane into dollars. For accounting purposes the planes are therefore valued at the FX rate at this time and that exchange rate does not change in subsequent accounts. In contrast the borrowings are denominated in dollars and in reality those borrowings are paid off by lease payments received in dollars from the airline. However, accounting rules require them to be converted to sterling at reporting dates rate. The repayments of principal and interest are also fixed and are matched to the dollar lease rentals received by the companies so in reality there is no currency mismatch at all, nor profit or loss effect.

As you will be aware, every quarter the DNA and AA4 vehicles issue fact sheets and in the case of the former there are tables which refer to the potential terminal asset value per share using the average value of the aircraft on sale as provided by the independent external appraisers. Investors may find these useful tools on which to measure the investments, as well as of course, the dividend yield.

I hope this has been useful.

Kind Regards

Marc Gordon
DDI: + 44 207 382 4560 | Mob: + 44 7785 297620 | Tel: + 44 207 382 4565 | Fax: +44 207 628 7548
Nimrod Capital LLP, 3 St Helen’s Place, London EC3A 6AB

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