Australia has passed legislation enabling the country to adopt the terms of the Cape Town Convention, an international treaty designed to protect and enhance commercial security and ownership interests in movable property including aircraft and engines.

As a result, lenders, lessors and investors will have the benefit of a uniform and internationally recognised security position across their portfolios, while borrowers are likely to be able to enjoy a discount on their existing funding costs in respect of Australian registered aircraft or aircraft mortgaged by or leased to Australian entities.

The Cape Town Convention will also have a significant impact on the relevance of the recently introduced Personal Property Securities Act 2009 (PPSA) to aviation finance.

Download PDF