%0 Journal Article %A Cameron A. Gee %T Aircraft Pre-Delivery Payment Financing Transactions—Updated for 2018 %D 2018 %R 10.3905/jsf.2018.1.064 %J The Journal of Structured Finance %P jsf.2018.1.064 %X The article discusses pre-delivery payment, or PDP, financing transactions for aircraft. PDPs are progress payments that a purchaser makes to a manufacturer while new aircraft are being built. They represent a significant cash expense for purchasers which, on average, amount to as much as 30% of the purchase price of a finished aircraft. The high cost of PDPs, particularly for purchasers of large numbers of aircraft, has led to the widespread use of PDP financing.The article explains how PDP financing transactions work. It discusses the key provisions typically included in documentation; in particular, the terms offered by manufacturers in “manufacturer’s consents” or “step-in agreements.” The article also discusses bankruptcy and “claw-back” risk, explaining what it is and how it can be managed, and finally discusses unique intercreditor issues for lenders in PDP financing transactions. The article updates and expands upon an article that was originally published in the Fall 2009 edition of The Journal of Structured Finance. %U https://jsf.pm-research.com/content/iijstrfin/early/2018/04/17/jsf.2018.1.064.full.pdf