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These excerpts taken from the AYR 10-K filed Mar 2, 2009. Finance
We have typically financed the initial purchase of aircraft
using short-term credit arrangements and cash on hand. We then
refinanced these short-term credit facilities on a long-term
basis with the net proceeds from subsequent securitizations,
bank debt and equity offerings. Our debt financing arrangements
are typically secured by the acquired aircraft and related
leases, and the financing parties have limited recourse to
Aircastle Limited. While such financing has historically been
available on reasonable terms given the loan to value profile we
have pursued, the current financial markets turmoil has
significantly reduced the availability of both debt and equity
capital. Though we expect the financing market to improve in
time, current market conditions are extremely difficult and we
are presently taking a very cautious approach to incremental
financing and with respect to refinancing risk.
To the extent that we acquire additional aircraft directly, we
intend to fund such investments through medium to longer-term
financings and cash on hand. We may repay all or a portion of
such borrowings from time to time with the net proceeds from
subsequent long-term debt financings, additional equity
offerings or cash generated from operations. Therefore, our
ability to execute our business strategy, particularly the
acquisition of additional commercial jet aircraft or other
aviation assets, depends to a significant degree on our ability
to obtain additional debt and equity capital on terms we deem
attractive.
See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Liquidity and
Capital Resources — Securitizations and Term Debt
Financings, — Credit Facilities, and —
Equity Offerings.”
Finance We have typically financed the initial purchase of aircraft using short-term credit arrangements and cash on hand. We then refinanced these short-term credit facilities on a long-term basis with the net proceeds from subsequent securitizations, bank debt and equity offerings. Our debt financing arrangements are typically secured by the acquired aircraft and related leases, and the financing parties have limited recourse to Aircastle Limited. While such financing has historically been available on reasonable terms given the loan to value profile we have pursued, the current financial markets turmoil has significantly reduced the availability of both debt and equity capital. Though we expect the financing market to improve in time, current market conditions are extremely difficult and we are presently taking a very cautious approach to incremental financing and with respect to refinancing risk. To the extent that we acquire additional aircraft directly, we intend to fund such investments through medium to longer-term financings and cash on hand. We may repay all or a portion of such borrowings from time to time with the net proceeds from subsequent long-term debt financings, additional equity offerings or cash generated from operations. Therefore, our ability to execute our business strategy, particularly the acquisition of additional commercial jet aircraft or other aviation assets, depends to a significant degree on our ability to obtain additional debt and equity capital on terms we deem attractive. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Securitizations and Term Debt Financings, — Credit Facilities, and — Equity Offerings.” This excerpt taken from the AYR 10-Q filed Nov 17, 2008. Finance
We have typically financed the initial purchase of aircraft
using committed short-term credit arrangements and cash on hand.
We then refinanced these short-term credit facilities on a
long-term basis with the net proceeds from subsequent
securitization and bank market debt as well as additional equity
offerings. Our debt financing arrangements are typically secured
by the acquired aircraft and related leases, and recourse to the
Company is limited. While such financing has historically been
available on reasonable terms given the loan to value profile we
have pursued, the current financial markets turmoil has reduced
significantly the availability of both debt and equity capital.
Though we expect the financing market to improve in time, we are
presently taking a cautious approach to incremental financing
and with respect to refinancing risk.
To the extent that we acquire additional aircraft directly, we
intend to fund such investments through medium to longer term
credit facilities and cash on hand. We may repay all or a
portion of such borrowings from time to time with the net
proceeds from subsequent long-term debt financings,
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additional equity offerings or cash generated from operations.
Therefore, our ability to execute our business strategy,
particularly the acquisition of additional commercial jet
aircraft or other aviation assets, depends to a significant
degree on our ability to obtain additional debt and equity
capital on terms we deem attractive.
See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Liquidity and
Capital Resources — Securitizations and Term Debt
Financings and — Credit Facilities.”
This excerpt taken from the AYR 10-Q filed Aug 8, 2008. Finance
We have typically financed the initial purchase of aircraft
using committed short-term credit arrangements and cash on hand.
These arrangements and our long-term financings are typically
secured by the acquired aircraft and related leases, and
recourse to the Company is limited. We believe such financing is
available on reasonable terms given the loan to value profile we
have pursued.
On May 2, 2008 two of our subsidiaries entered into a seven
year, $786.1 million term debt facility, which were refer
to as Term Financing No. 1, to finance a portfolio of 28
aircraft. The loans under Term Financing No. 1 were funded
into an aircraft purchase escrow account on May 2, 2008.
These loans were released to us as the financed aircraft
transferred into the facility. Proceeds from the financing were
used to repay related outstanding amounts for the aircraft under
the Company’s Amended Credit Facility No. 2 and
2008-A
Credit Facility. The loans bear interest on a floating rate
basis at a rate of one-month LIBOR plus 1.75% and mature on
May 11, 2015. Our aggregate up-front costs, including fees
payable to the lenders and legal and professional service fees
but excluding termination fees on certain of our existing
interest rate hedging contracts, were approximately
$15.0 million. We entered into new interest rate hedging
arrangements with respect to a substantial portion of the
principal balance of the loans under Term Financing No. 1
in order to effectively pay interest at a fixed rate on a
substantial portion of the loans. Obligations owed to hedge
counter-parties under these contracts are secured pari passu
basis by the same collateral that secures the loans under
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Term Financing No. 1 and, accordingly, we have no
obligation to pledge cash collateral to secure any loss in value
of the hedging contracts if interest rates fall.
During the second quarter of 2008, we refinanced and transferred
26 aircraft from Amended Credit Facility No. 2 into the
Term Financing No. 1. At June 30, 2008, we had
borrowings of $255.2 million related to 11 aircraft under
our Amended Credit Facility No. 2. On June 3, 2008, we
paid the remaining balance of $187.3 million on the
2008-A
Credit Facility with proceeds from the refinancing, transferred
the two aircraft into Term Financing No. 1 and terminated
the 2008-A
Credit Facility.
To the extent that we acquire aircraft directly, we intend to
continue funding aircraft acquisitions initially through
borrowings under our short-term credit facilities and cash on
hand, and to repay all or a portion of such borrowings from time
to time with the net proceeds from subsequent long-term debt
financings, additional equity offerings or cash generated from
operations. Therefore, our ability to execute our business
strategy, particularly the acquisition of additional commercial
jet aircraft or other aviation assets, depends to a significant
degree on our ability to obtain additional debt and equity
capital on terms we deem attractive.
To the extent we acquire aircraft through any future investment
vehicles, we will seek to establish separate financings for such
projects in a manner broadly consistent with the approach we
have used previously. We also intend to extend, modify or
replace our short-term credit facilities during the remainder of
2008 and we intend to pursue debt financing for a portion of the
pre-delivery payments for the New A330 Aircraft. However, the
level of new investment activity and, in turn, financing
requirements, will be driven by the attractiveness of new
investment opportunities available in the marketplace and
financial market conditions. Decisions by investors and lenders
to enter into such transactions with us will depend upon a
number of factors, such as our historical and projected
performance, compliance with the terms of our current credit
arrangements, industry and market trends, the availability of
capital and the relative attractiveness of alternative
investments. See “Management’s Discussion and Analysis
of Financial Condition and Results of Operations —
Liquidity and Capital Resources — Securitizations and
Term Debt Financing and — Credit Facilities.”
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This excerpt taken from the AYR 8-K filed Sep 26, 2007. Finance A key aspect of our growth strategy is our capital management approach, which supports the financing of our acquisitions of aircraft and other aviation assets. We typically finance the initial purchase of aircraft and other aviation assets using flexible, committed short-term credit arrangements and cash on hand. We believe our ability to execute acquisitions expeditiously and without financing contingencies have benefited us in competitive bidding situations. Our short-term borrowed funds for our aircraft acquisitions and repurchase obligations for our securities are provided by secured term credit facilities from banks. See “— Liquidity and Capital Resources — Credit Facilities.” We intend to access the securitization market or other cost effective markets to provide long-term financing for our aircraft portfolio. On June 15, 2006, we closed our first securitization of 40 aircraft, which we refer to as Securitization No. 1. The ACS 2006-1 Pass Through Trust, a newly formed trust, issued a single class of G-1 pass through trust certificates, which we refer to as the certificates, representing undivided interests in $560 million of floating rate asset-backed notes, which we refer to as notes, issued by our wholly owned subsidiaries and supported by 40 aircraft which we refer to as Portfolio No. 1. The principal balance of the notes is equal to 54.8% of the Initial Appraised Value of Portfolio No. 1 of $1.022 billion. Initial Appraised Value is the lesser of the mean and the median of base value appraisals obtained from three internationally recognized appraisal firms during the period October 2005 through December 2005. We retained 100% of the rights to receive future cash flows from Portfolio No. 1 after the payment of claims that are senior to our rights. All claims are senior to our rights to receive future cash flows, including but not limited to payment of expenses related to the aircraft and fees of service providers, interest and principal payments to certificate holders, amounts owed to hedge providers and amounts, if any, owed to the policy provider and liquidity provider under Securitization No. 1 for previously unreimbursed advances. The notes bear interest at one-month LIBOR plus 0.27%. Financial Guaranty Insurance Company, or FGIC, issued a financial guaranty insurance policy to support the payment of interest when due on the certificates and the payment, on the final distribution date, of the outstanding principal amount of the certificates. The certificates are rated Aaa and AAA by Moody’s Investor Service and Standard & Poor’s rating services, respectively. We are parties to a series of interest rate hedging contracts intended to hedge the interest rate exposure associated with issuing floating-rate obligations backed by primarily fixed-rate lease assets. These contracts, together with the guarantee premium, the spread referenced above and other costs of trust administration result in a fixed rate cost of 6.6% per annum, including the amortization of issuance fees and expenses. We are currently utilizing a $1.25 billion senior secured credit facility, which we refer to as Amended Credit Facility No. 2, to finance up to 65% of the purchase price of certain aircraft not included in Securitization No. 1. We expect to continue to purchase aircraft using our credit facilities plus cash on hand and, once a portfolio of 30 to 60 aircraft has been acquired, finance the portfolio on a long-term basis using a securitization structure similar to Securitization No. 1. Based on our expected aircraft acquisition plan, we anticipate completing one or two portfolio securitizations per year and one or two additional equity offerings per year. Our ability to successfully complete these securitizations and equity offerings on favorable terms will have a significant impact on our results of operations and financial condition. On August 11, 2006, we completed our initial public offering of 10,454,535 common shares at a price of $23.00 per share, raising $240.5 million before offering costs. The net proceeds of our initial public offering, after our payment of $16.8 million in underwriting discounts and commission expense, and $4.1 million in offering expenses, were $219.6 million, $205.5 million of which was used to repay a portion of Amended Credit Facility No. 2. The remainder of the net proceeds was used for working capital requirements and to fund additional aircraft acquisitions.
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On February 13, 2007, we completed a follow-on public offering of 15,525,000 common shares at a price of $33.00 per share, raising $512.3 million before offering costs. The net proceeds of the offering, after our payment of $17.9 million in underwriting discounts and commissions and $1.6 million in offering expenses, were $492.8 million, $398.1 of which was used to repay borrowings under Amended Credit Facility No. 2 and $75.0 million of which was used to repay borrowings under the Revolving Credit Facility (as described below). The remainder of the net proceeds was used for other general corporate purposes. | EXCERPTS ON THIS PAGE:
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