AFIC(Aircraft Finance Insurance Consortium)

The ANPI policy serves as the backbone of AFIC financing.

If a borrower defaults on its repayment obligations, the insurers jointly guarantee payment to the lenders, ensuring full recovery of the outstanding balance.
This policy is non-cancellable and provides a level of credit enhancement equivalent to a sovereign-backed guarantee—without the bureaucratic complexity of government processes.

AFIC financing has since become a viable and respected funding source for airlines across the world, particularly for Boeing aircraft acquisitions, offering both lenders and borrowers greater predictability and speed.

Key agreements in an AFIC structure include:

• - Loan and Security Agreement – governing repayment and collateral.

- ANPI Policy and Assignment Agreement – granting lenders enforceable rights to claim insurance proceeds.

- Intercreditor Agreements – managing multiple lender rights.

- Aircraft Lease and Purchase Contracts – aligned with manufacturer delivery schedules.

Each document must align with international aviation law, including the Cape Town Convention, to ensure that lenders retain enforceable rights over the aircraft and associated revenues.
Proper legal drafting is essential to avoid enforcement disputes and cross-border inconsistencies in the event of default.

For financial institutions, AFIC reduces risk exposure through ANPI-backed repayment protection.
For airlines, it offers the ability to negotiate better financing terms and diversify funding beyond traditional ECA programs.

• - Insurance enforceability – Verifying that the ANPI policy is legally valid and non-cancellable.

- Collateral and lien perfection – Ensuring aircraft registration and interests are filed under the Cape Town Convention.

- Tax and withholding issues – Managing cross-border payments and premium taxation.

- Jurisdiction and governing law – Selecting optimal dispute resolution frameworks under New York or English law.

Our aviation finance attorneys conduct in-depth due diligence on both the borrower’s credit profile and the insurers’ financial stability, ensuring every party’s obligations are legally binding and internationally enforceable.

In securitization transactions, AFIC-backed notes are treated as investment-grade due to the insurance protection on underlying cash flows.
Our attorneys advise on policy assignment, reinsurance structures, and direct rights of action, ensuring that investor protections remain intact across multiple layers of the transaction.

This innovative approach has enabled AFIC to integrate into structured finance markets, supporting complex financing strategies for both lessors and institutional investors.

• - ESG-linked financing – Integrating sustainability performance targets into AFIC loan terms.

- Reinsurance partnerships – Diversifying insurer exposure and expanding capacity.

- Digital documentation and blockchain – Enabling faster claims processing and transaction verification.

- Global regulatory harmonization – Aligning AFIC transactions with Solvency II and Basel III standards.

These developments signal AFIC’s transformation from a niche Boeing solution into a global financing platform applicable across the aviation ecosystem.