A US-based global alternative investment manager has announced the creation of Itasca Re Limited, a Bermudian-licensed Class 3B reinsurance company, to offer insurance financing solutions to buyers and owners of commercial aircraft assets.

Minneapolis-headquartered Castlelake LP, which specialises in asset-backed private credit, said it has 17 years of experience investing in, financing and managing aviation assets.

It said the solutions offered by Itasca Re are designed to attempt to enable competitive financing rates for aircraft asset buyers by transferring the non-payment risk traditionally held by financiers to third parties via an insurance policy issued by Starr Insurance Companies that is reinsured by Itasca Re and other potential third-party reinsurers pursuant to a dedicated reinsurance agreement.

Itasca Re will be led by experienced aviation industry veteran Kostya Zolotusky, who most recently led the Integrated Finance Linked Insurance division of Piiq Risk Partners Ltd, an insurance broker focused on the aviation sector associated with The Ardonagh Group, the largest independent insurance broker in the United Kingdom. Piiq will provide exclusive brokerage services to Starr and Itasca Re.

"Itasca Re is the latest step Castlelake has taken to strategically innovate and expand the financing solutions it can offer," said Joe McConnell, partner and deputy co-chief investment officer at Castlelake.

"Itasca Re brings reinsurance support for creative, customisable and cost-efficient insurance-backed products to our airline partners and other buyers and owners of commercial aircraft assets at what we see as a time of high need."

Armin Rothauser, partner, Asset-backed Direct Lending, at Castlelake, added: "With the experience and expertise of the Itasca Re team and partnerships with established market participants, we believe Itasca Re will quickly become a go-to solution provider for global airlines and the broader aviation market."

Castlelake said Itasca Re is expected to provide a broad spectrum of insurance-backed risk solutions in the aviation finance sector, including servicing airlines and operating lessors seeking to purchase or refinance new or vintage aircraft assets as well as financiers seeking alternative syndication or de-risking options for their loan portfolios.

Itasca Re's dedicated focus on aircraft secured financing and its team's experience is expected to enable more nuanced asset-secured insurance financing solutions than what has been available in the current insurance market.

Castlelake has been a strategic partner and active capital provider to aviation asset owners and lessees since its inception, having invested more than $17 billion in aviation opportunities, acquired more than 650 aircraft and developed relationships with approximately 200 airlines.

Founded in 2005, Castlelake manages approximately $20 billion of assets. The Castlelake team comprises more than 250 experienced professionals, including 95 investment professionals, across six offices in North America, Europe and Asia.

Starr Insurance Companies is a marketing name for the operating insurance and travel assistance companies and subsidiaries of Starr International Company Inc and for the investment business of CV Starr & Co Inc and its subsidiaries.

Starr's insurance company subsidiaries are domiciled in Bermuda, the US, China, Hong Kong, Malta, Singapore, Switzerland and Britain.