Developments

Latest issue published
May 23rd: The latest issue of Aviation Finance is published. In recent issues Aviation Finance has reported on the new investors who have entered into the aviation finance sphere through funds and capital markets. Amongst other things with such low interest rates, investors have been encouraged to enter the aviation finance fray. Aircastle's CEO in this issue indicates how specialised players, among them specialist lessors such as his firm, are bringing diversity to the market, thereby enriching its overall attractiveness.

ILFC prices $550 million of unsecured floating rate senior notes due 2016
May 22nd: International Lease Finance Corporation (ILFC) has priced, and entered into an agreement to issue and sell, subject to certain conditions, $550 million aggregate principal amount of floating rate senior notes due 2016. The interest rate on the notes for the first interest period will be the rate equal to the three-month U.S. dollar London Interbank Offered Rate (“LIBOR”), as determined on May 22, 2013, plus 1.95 per cent. Thereafter, the notes will pay interest at a rate equal to the three-month U.S. dollar LIBOR plus 1.95 per cent.

Perspectives

Specialised players bringing diversity to the market

Aircastle's Ron Wainshal on the firm's growth plans and the relative attractiveness of widebody aircraft

News Analysis

Air Arabia secures $350 million financing for 10 aircraft
May 21st: Air Arabia, the United Arab Emirates-based low cost carrier, has signed a $350 million deal with Qatar National Bank SAQ and Commercial Bank International to finance 10 new Airbus A320 aircraft. The 10 aircraft form part of the airline's order for 44 A320 aircraft, placed in 2007. The airline currently operates a fleet of 33 A320 aicraft, and serves 85 routes from its three hubs in the UAE, Morocco and Egypt.

Intrepid Aviation closes €34m PDP facility with BNP Paribas
May 21st: Intrepid Aviation have closed a US $34m PDP (“Pre-Delivery Payment”) financing facility with BNP Paribas, New York, covering two A330 aircraft ordered from Airbus and delivering in 2014. This is Intrepid’s first financing facility with BNP Paribas. In late April the lessor closed a $100 million revolving PDP facility with Citi which is to be used to cover eight A330 aircraft ordered from Airbus, due to be delivered in 2014 and 2015.

FLY re-prices term loan at 1% reduction on previous rate
May 16th: FLY Leasing Limited has re-priced its 2012 term loan. The interest rate on the amended loan will be LIBOR plus 3.50%, a 1.00% reduction from the previous interest rate. In addition, the LIBOR floor has been reduced to 1.00%, a reduction of 0.25%.

Deals & New Business

United orders 30 E-Jets, with options for 40 more

Milestone Aviation orders 30 Sikorsky helicopters, fleet surpasses $1.3 billion

Aldus and Republic Airways place large Embraer orders, Embraer's John Slattery talks about their E-jet strategy

Avolon & Wells Fargo to form $500m joint-venture aircraft leasing business

China makes 'Big Move' as AIG proposes to sell up to 90 p.c. stake to consortium planned to include ICBC, in $5.3 bn deal

Boeing and Aviation Capital Services sign deal for 35 737 MAX aircraft

Singapore Airlines orders $7.5 billion worth of Airbus jets

Alaska Airlines orders 50 Boeing aircraft

GECAS, Boeing finalise order for 85 737 MAXs and Next-Generation 737s, with options for up to 15 additional 737-800s

CCB Financial Leasing orders 50 C919 passenger aircraft

Financing & Risk Strategies

Hong Kong Aviation Capital's Peter Huijbers on the reduced availability of commercial lending, the increased cost of capital for refinancing portfolios and the pressure on residual values.

The key insights for leasing industry investors from public lessor conference calls

Aircastle's CEO enters debate on aircraft lifespan and residual value estimates

ABS backed by jet engines: a stable and low cost way of raising finance

The challenges and opportunities for lessors in the European short haul market

Research paper argues that standard aircraft retirement age of 25 will remain the norm

Are global airlines around the corner?

Airbus Global Market Forecast: fuel consumption and emissions to drive replacements, and demand

US Ex-Im backed PFN bonds oversubscribed at record low spreads

The Top 10 risks facing airlines, ranked by Ernst & Young across the 5 global regions

The Cutting Edge

SPV structures can tap alternative investor base

ILFC sale extended by a month: 8-K filing
May 13th: AIG's divestment of International Lease Finance Corporation to a consortium of Chinese companies, led by New China Trust, New China Life Insurance, and P3 Investments, has been extended by one month according to an amendment to ILFC's 8-K filing to the United State's Securities and Exchange Commission. The 8-K filing says that the deal is now expected to close in the second quarter of 2013.

Latest issue published
May 9th: The latest issue of Aviation Finance is published. One of the relatively unexplored segments of the aviation leasing market was helicopters, up to now, with the dominance of Milestone, whose success in building a $1.2 bn plus portfolio and $2.2 bn order book was inevitably going to attract the attention of new entrants. Waypoint's success in attracting the interest of a group of astute investors, including those with virtual celebrity status in the form of Michael Dell and George Soros has to be seen as a vote of confidence in the overall aviation leasing model.

ALC diluted eps up 46 p.c. in Q1 on Q1 2012, but revenues slightly shy of forecast
May 9th:: Air Lease Corporation's Q1profit rose to $40.0 m. or $0.38 per share from $26.93 m. or $0.26 per share in Q1 2012. The revenue figures while demonstrating the "robust growth plan" of the lessor were slightly shy of analysts' forecasts by about 2%.

News Analysis

Bombardier reports 22.8 p.c. rise in revenues in Q1, compared with Q1 2012.
May 9th: Bombardier today reported its financial results for Q1 2013 showing revenues of USD$4.3 billion for the quarter ended March 31, compared to $3.5 billion for the same period last fiscal year. For the first quarter of 2013, earnings before financing expense, financing income and income taxes (EBIT) before special items totalled $240 million, or 5.5% of revenues, compared to $188 million, or 5.4% in Q1 2012.

ALC Announces the Closing of a 4 year Unsecured Revolving Bank Credit Facility
May 7th: Air Lease Corporation have announced the closing of a 4 year unsecured revolving bank credit facility for $1.7 billion.

AWAS reprices term loan
May 7th AWAS has closed a re-pricing of its 2012 term loan to achieve more attractive pricing. The repricing follows on from a similar move in March to reprice a 2010 term loan. This latest repricing sees the LIBOR margin of the loan drop from 3.5% to 2.75%.

Willis Lease Finance portfolio exceeds $1 billion, but earnings down in Q1
May 6th: Willis Lease Finance's portfolio increased by 4.6 per cent in the first quarter of 2013 to reach $1.02 billion, according to the engine lessor's Q1 2013 trading update. Earnings fell to $1.6 million, down from $2.5 million in Q1 2012.

BOC Aviation re-opens and increases notes issuance
May 3rd: BOC Aviation has decided to tap into the high investor demand for its 10-year unsecured notes by re-opening the issuance and increasing it by $150 million. On April 25th the lessor priced $350 million 4.375% 10-Year Senior Unsecured Notes due 2023, which was issued off BOC Aviation's US$2 billion euro Medium Term Note Programme (EMTN programme) established in September 2012.

Aircastle increased 2013 purchase commitments above $450 million in the first quarter, as Q1 earnings fall 29 per cent
May 2nd: Aircastle increased its aircraft purchase commitments for 2013 to over $450 million in the first quarter according to CEO Ron Wainshal. The lessor reported net income of $23.1 million, (down 29 per cent on Q1 2012), or $0.34 per diluted common share, and adjusted net income of $27.4 million, or $0.40 per diluted common share for the first quarter, despite an increase in lease rental and finance lease revenues to $160.5 million (Q1 2012: $152.2 million).