Shares of Aircastle (AYR) Jump After Announcing $786.1 Million Term Debt Facility

May 5, 2008 10:52 AM EDT

In Today's 8-K Filing From Aircastle (NYSE: AYR): On May 2, 2008, ACS 2008-1 Limited and ACS Aircraft Finance Ireland 3 Limited, each a subsidiary of Aircastle Limited, entered into a credit agreement with Calyon New York Branch as Sole Bookrunner, and with Calyon New York Branch, HSH Nordbank AG, New York Branch, KfW Ipex-Bank GmbH and DVB Bank AG acting as Joint Lead Arrangers (the "JLAs"). The Borrowers will acquire 28 aircraft from other subsidiaries of Aircastle using, in part, the proceeds of the $786.1 million in loans to the Borrowers under the ACS 2008-1 Credit Agreement. The Sellers will use the proceeds of the sale of the Aircraft to the Borrowers to repay funds outstanding under existing Aircastle credit facilities.

We estimate that our aggregate up-front costs, including fees payable to the JLAs and legal and professional service fees but excluding termination fees on our interest rate hedging contracts, will equal approximately $16.5 million.

The $786.1 million aggregate amount of the Loans represents approximately 65% of the current market half-life appraised value of Portfolio No.3, pursuant to an appraisal conducted by an appraiser as of January 2008, and scheduled principal amortization on the Loans during the first five years will equal approximately $49 million per year.

After May 2, 2009, if the debt service coverage ratio in two consecutive months falls below 1.32 or if the loan to value ratio exceeds 75%, then Excess Cash Flow from Portfolio No. 3 will be applied to the prepayment of the principal balance of the Loans until such time as the debt service coverage ratio exceeds 1.32 and the loan to value ratio falls below 75%. The "value" of Portfolio No. 3 will be determined by annual appraisals, using the lower of maintenance adjusted current market value and maintenance adjusted base value, and such "value" will reduce by 0.50% per month between appraisals.

Guarantors. All obligations of each Borrower in respect of the Loans are unconditionally guaranteed by the other Borrower but not by Aircastle. Aircastle guarantees the representations, warranties and covenants of the Sellers.

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• Calyon Securities
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