AerCap Holdings N.V. Announces Closing of $500 Million Inaugural Sukuk Issuance

Rhea-AI Summary

AerCap Holdings N.V. (AER) has successfully completed its inaugural $500 million Sukuk issuance, priced at a 4.500% profit rate with a five-year maturity. The trust certificates were issued by Aercap Sukuk The company plans to use the net proceeds for general corporate purposes, including acquiring, investing in, financing or refinancing aircraft assets and repaying indebtedness.

Arab Banking (B.S.C.) acted as Arranger and Joint Lead Manager, while Dubai Islamic Bank PJSC, Emirates NBD Bank PJSC, HSBC Bank plc, J.P. Morgan Securities plc, and KFH Capital Investment Company K.S.C.C. served as Joint Lead Managers. Warba Bank K.S.C.P. acted as Co-Lead Manager for the issuance.

Positive

• Successful completion of $500 million Sukuk issuance
• Diversification of funding sources through inaugural Sukuk offering
• Competitive 4.500% profit rate for the five-year maturity period
• Proceeds to be used for strategic purposes including aircraft asset acquisition and debt repayment

Negative

• Increase in company's debt obligations

Insights

Financial Analyst

AerCap's successful $500 million Sukuk issuance marks a significant milestone in the company's financing strategy. The 4.500% profit rate and five-year maturity indicate favorable terms, reflecting investor confidence in AerCap's creditworthiness. This diversification into Islamic finance opens up new funding avenues and potentially broadens the investor base.

The use of proceeds for general corporate purposes, including aircraft acquisitions and debt repayment, provides financial flexibility. This could strengthen AerCap's position in the competitive aircraft leasing market. The involvement of major financial institutions as lead managers underscores the deal's credibility and AerCap's strong relationships in the global financial community.

For investors, this Sukuk issuance demonstrates AerCap's proactive approach to capital management and its ability to tap into diverse funding sources, which could positively impact the company's long-term financial stability and growth prospects.

Islamic Finance Expert

AerCap's inaugural Sukuk issuance is a strategic move that aligns with the growing trend of conventional companies tapping into the Islamic finance market. The $500 million size is substantial for a debut issuance, indicating strong demand from Sharia-compliant investors. The 4.500% profit rate is competitive, suggesting that AerCap has successfully positioned itself as an attractive investment opportunity in the Sukuk market.

The structure of the Sukuk, issued through Aercap Sukuk , likely involves an ijara (lease) or wakala (agency) arrangement, common in aircraft financing. This structure allows AerCap to comply with Islamic finance principles while achieving its funding objectives. The participation of prominent Islamic banks alongside conventional institutions in the deal highlights the growing convergence of Islamic and conventional finance in global capital markets.

This issuance could pave the way for more Sukuk offerings from AerCap and potentially inspire other aircraft leasing companies to explore Islamic finance options, contributing to the sector's growth and diversification.

DUBLIN, Oct. 3, 2024 /PRNewswire/ -- AerCap Holdings N.V. (the "Company") is pleased to announce the successful completion of its inaugural benchmark Sukuk issuance of $500 million priced at a profit rate of 4.500%, with a five-year maturity period. The trust certificates in Sukuk format were issued by Aercap Sukuk Limited.

The Company intends to use the net proceeds from the issuance for general corporate purposes, including to acquire, invest in, finance or refinance aircraft assets and to repay indebtedness.

Arab Banking Corporation (B.S.C.) acted as Arranger and Joint Lead Manager. Dubai Islamic Bank PJSC, Emirates NBD Bank PJSC, HSBC Bank plc, J.P. Morgan Securities plc and KFH Capital Investment Company K.S.C.C. acted as Joint Lead Managers and Warba Bank K.S.C.P. acted as Co-Lead Manager.

This press release shall not constitute an offer to sell or purchase or the solicitation of an offer to sell or purchase the certificates or any other securities, nor shall there be any offer, solicitation, purchase or sale of these securities in any state or jurisdiction in which such offer, solicitation, purchase or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About AerCap

AerCap is the global leader in aviation leasing with one of the most attractive order books in the industry. AerCap serves approximately 300 customers around the world with comprehensive fleet solutions. AerCap is listed on the New York Stock Exchange (AER) and is based in Dublin with offices in Shannon, Miami, Singapore, Memphis, Amsterdam, Shanghai, Dubai and other locations.

Forward-Looking Statements

This press release contains certain statements, estimates and forecasts with respect to future performance and events. These statements, estimates and forecasts are "forward-looking statements". In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as "may," "might," "should," "expect," "plan," "intend," "will," "aim," "estimate," "anticipate," "believe," "predict," "potential" or "continue" or the negatives thereof or variations thereon or similar terminology. All statements other than statements of historical fact included in this press release are forward-looking statements and are based on various underlying assumptions and expectations and are subject to known and unknown risks, uncertainties and assumptions, and may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied in the forward-looking statements, including but not limited to the availability of capital to us and to our customers and changes in interest rates; the ability of our lessees and potential lessees to make lease payments to us; our ability to successfully negotiate flight equipment (which includes aircraft, engines and helicopters) purchases, sales and leases, to collect outstanding amounts due and to repossess flight equipment under defaulted leases, and to control costs and expenses; changes in the overall demand for commercial aviation leasing and aviation asset management services; the continued impacts of the Ukraine Conflict, including the resulting sanctions by the United States, the European Union, the United Kingdom and other countries, on our business and results of operations, financial condition and cash flows; the effects of terrorist attacks on the aviation industry and on our operations; the economic condition of the global airline and cargo industry and economic and political conditions; the impact of current hostilities in the Middle East, or any escalation thereof, on the aviation industry or our business; development of increased government regulation, including travel restrictions, sanctions, regulation of trade and the imposition of import and export controls, tariffs and other trade barriers; a downgrade in any of our credit ratings; competitive pressures within the industry; regulatory changes affecting commercial flight equipment operators, flight equipment maintenance, engine standards, accounting standards and taxes; and disruptions and security breaches affecting our information systems or the information systems of our third-party providers.

As a result, we cannot assure you that the forward-looking statements included in this press release will prove to be accurate or correct. These and other important factors and risks are discussed in AerCap's annual report on Form 20-F and other filings with the SEC. In light of these risks, uncertainties and assumptions, the future performance or events described in the forward-looking statements in this press release might not occur. Accordingly, you should not rely upon forward-looking statements as a prediction of actual results and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. Except as required by applicable law, we do not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/aercap-holdings-nv-announces-closing-of-500-million-inaugural-sukuk-issuance-302266792.html

SOURCE AerCap Holdings N.V.

FAQ

What is the size and profit rate of AerCap's (AER) inaugural Sukuk issuance?

AerCap Holdings N.V. (AER) completed a $500 million Sukuk issuance with a profit rate of 4.500% and a five-year maturity period.

How does AerCap (AER) plan to use the proceeds from the Sukuk issuance?

AerCap intends to use the net proceeds for general corporate purposes, including acquiring, investing in, financing or refinancing aircraft assets and repaying indebtedness.

Who were the key financial institutions involved in AerCap's (AER) Sukuk issuance?

Arab Banking acted as Arranger and Joint Lead Manager, with Dubai Islamic Bank, Emirates NBD Bank, HSBC Bank, J.P. Morgan Securities, and KFH Capital Investment Company as Joint Lead Managers. Warba Bank acted as Co-Lead Manager.

When did AerCap Holdings N.V. (AER) close its inaugural Sukuk issuance?

AerCap Holdings N.V. (AER) announced the closing of its inaugural Sukuk issuance on October 3, 2024.