Air Lease wraps exchange offer for 7 3/8% notes due 2019

By Marisa Wong

Madison, Wis., June 21 - Air Lease Corp. offered to exchange up to $151,614,000 principal amount of its 5 5/8% senior notes due 2017 for any and all of its outstanding 7 3/8% senior notes due Jan. 30, 2019. The offer expired at 5 p.m. ET on June 20 and is expected to settle on June 26, according to an 8-K filed Friday with the Securities and Exchange Commission.

Air Lease began the exchange offer on June 11.

According to an earlier S-4 filing, the total principal amount of 7 3/8% notes outstanding at the start of the offer was $143.95 million. The company originally issued $155 million of the 7 3/8% notes in January 2012 and made a scheduled prepayment of $11.05 million on Jan. 30.

The 5 5/8% notes offered in exchange will comprise part of the same series as and will be fungible with the company's $1 billion of existing 5 5/8% notes issued in September 2012.

For each $1,000 "original face amount" of 7 3/8% notes tendered by the expiration of the offer, holders will receive an exchange consideration of $978.15 principal amount of 5 5/8% notes. The "original face amount" is based on the $155 million aggregate principal amount at issuance.

The exchange consideration, expressed per $1,000 currently remaining principal amount of old notes (of the $143.95 million outstanding) accepted for exchange, is in effect $1,053.24 principal amount of new notes.

Holders will be entitled to receive accrued interest on the old notes to but excluding the settlement date. At the same time, they will be required to pay accrued interest on the new notes. As a result, the company will pay holders an accrued interest adjustment amount.

Assuming a settlement date of June 26, holders will receive an accrued interest adjustment amount in cash of $14.35 per $1,000 original face amount of 7 3/8% notes or, equivalently, $15.45 per $1,000 remaining principal amount of old notes.

Holders had to tender notes in minimum denominations of $100,000 original face amount, but the exchange offer was not subject to any overall minimum tender condition.

Los Angeles-based Air Lease is an aircraft leasing company.

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