AerCap Proposes $2.6B Offering to Finance ILFC Acquisition



Aircraft leasing company AerCap Holdings announced it is proposing to offer $2.6 billion aggregate principal amount of senior notes, consisting of three tranches of varying tenor in a private placement. The notes will be fully and unconditionally guaranteed on a senior unsecured basis by the company and certain other subsidiaries of the company.

AerCap said it intends to use the net proceeds from the notes to finance part of the consideration payable in connection with the company’s previously announced acquisition of 100% of the common stock of International Lease Finance, a wholly-owned subsidiary of American International Group.

Reuters noted in a related report the sale of ILFC by AIG represents the last transfer of a large fleet of leased aircraft (more than 900), following RBS’s sale of its leased aircraft fleet in 2012 and CIT’s re-emergence from bankruptcy. Reuters quoted the Fitch rating agency as saying, “Once the AerCap deal closes, a material consolidation in the industry will be complete, with two large players (AerCap and GECAS) controlling close to half of all lessor-owned aircraft globally.”

AerCap is buying 100% of ILFC. In exchange, AIG will receive $3 billion in cash and 97.6K AER shares. The cash portion of the consideration was funded through a combination of new debt and cash of the combined company, Reuters said.

To view the full Reuters report, click here.


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