Air Lease Corporation Announces Closing of Offering of €600 Million of Senior Unsecured Medium-Term Notes
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Insights
The completion of Air Lease Corporation's €600 million bond offering is a significant event for the company's financial strategy. The decision to enter the European bond market reflects a strategic move to diversify funding sources and tap into a wider investor base. With a 3.70% annual interest rate, the offering is competitive, especially in a global environment where interest rates have been fluctuating. This rate needs to be compared against the backdrop of the company's credit rating and the prevailing interest rates in the eurozone to evaluate the attractiveness of the offering to investors.
Furthermore, the use of proceeds for general corporate purposes, including the purchase of commercial aircraft and repayment of existing debt, indicates a proactive approach to capital management. By refinancing existing indebtedness, the company may potentially lower its cost of capital, which is beneficial for its profitability and long-term financial health. Investors should monitor how these strategic moves affect the company's leverage ratios and overall financial stability.
The entry of Air Lease Corporation into the European bond market could be indicative of broader market trends where companies seek to capitalize on international investment opportunities. The upsizing of the transaction suggests a strong appetite from European and global investors for corporate bonds, particularly in the aircraft leasing industry. This industry is sensitive to economic cycles and investor confidence might be interpreted as a positive sign for the sector's outlook.
It's essential to consider the impact of such financial moves on the company's stock performance. Typically, successful bond offerings can reassure shareholders about a company's liquidity and financial flexibility, potentially leading to positive sentiment in the stock market. However, the long-term impact will largely depend on the company's ability to manage its debt effectively and leverage the raised capital for growth-enhancing investments.
The legal framework surrounding the offering, including the effective shelf registration statement and the pricing supplement, is a critical element in the execution of such financial instruments. It ensures compliance with SEC regulations and provides transparency for investors. The fact that the offering was managed by reputable financial institutions like BBVA, Deutsche Bank and J.P. Morgan adds a layer of credibility to the transaction.
Investors should be aware of the legal implications of the notes, such as the rights and protections afforded to them and how these notes rank in priority in case of default. It's also important to note that the press release explicitly states the absence of an offer to sell in jurisdictions where it would be unlawful, highlighting the importance of adhering to international securities laws.
“We are pleased to announce the successful closing of our inaugural EUR bond offering. The deal saw strong support and subscription from a broad array of European and global investors allowing us to upsize the transaction and price at an attractive cost of funds. The EUR market will serve as another strategic component of our global funding program as we seek to diversify our sources of liquidity,” said Greg Willis, Executive Vice President & Chief Financial Officer of Air Lease Corporation.
The Company intends to use the net proceeds of the offering for general corporate purposes, which may include, among other things, the purchase of commercial aircraft and the repayment of existing indebtedness.
BBVA, Deutsche Bank, J.P. Morgan, NatWest Markets, and Societe Generale acted as joint book-running managers for the offering of the Notes.
The Notes were offered pursuant to the Company’s effective shelf registration statement, previously filed with the Securities and Exchange Commission (the “SEC”) on May 7, 2021, and a pricing supplement, dated March 20, 2024, supplementing the prospectus supplement, dated May 7, 2021, supplementing the base prospectus, dated May 7, 2021.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the Notes, nor shall there be any sale of the Notes in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the intended use of proceeds. Such statements are based on current expectations and projections about the Company’s future results, prospects and opportunities and are not guarantees of future performance. Such statements will not be updated unless required by law. Actual results and performance may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors, including but not limited to unanticipated cash needs, and those risks detailed in the Company’s filings with the SEC, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240328618678/en/
Investors:
Jason Arnold
Vice President, Investor Relations
Phone: +1 310.553.0555
Email: investors@airleasecorp.com
Media:
Laura Woeste
Senior Manager, Media & Investor Relations
Ashley Arnold
Senior Manager, Media & Investor Relations
Phone: +1 310.553.0555
Email: press@airleasecorp.com
Source: Air Lease Corporation
FAQ
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