Avolon gives early results, pricing for upsized exchange offer

Chicago, Aug. 16 – Avolon Holdings Ltd. wholly owned subsidiaries Avolon Holdings Funding Ltd. and Park Aerospace Holdings Ltd. announced the early participation results for the exchange offers for eight outstanding debt securities for new securities issued by Avolon Holdings Funding and, in some cases, cash, according to a news release early Monday.

Pricing details and acceptance amounts were released later in the day in a separate press release.

The $2 billion of new senior notes will mature on Nov. 18, 2027 and will bear interest at 2.528%, determined using the 0.625% Treasury note due 2026 plus 180 basis points as determined at 10 a.m. ET on Aug. 16.

Tendered notes will be accepted using a waterfall method under which old notes will be accepted in order of acceptance priority up to an amount that would not cause more than $2 billion of new notes to be issued. The maximum amount has been raised from the initially announced $1.25 billion of new notes.

The company received tenders for the following amounts of notes by the early deadline, 5 p.m. ET on Aug. 13 (also the withdrawal deadline) and will accept the following amounts of notes:

• All of the $744,401,000 tendered of the $1,234,023,000 of 5.25% notes due Aug. 15, 2022 (Cusips: 70014LAA8, G6935LAA1) issued by Park with pricing based on the 1.75% Treasury note due July 15, 2022 plus 50 bps equal to $862.25 of new notes with $180 in cash for a total exchange price of $1,042.25;

• All of the $310,597,000 tendered of the $414.58 million of 5.5% notes due Jan. 15, 2023 (Cusips: 05401AAA9, G0686BAA7) issued by Avolon Holdings Funding with pricing based on the 0.125% Treasury note due July 31, 2023 plus 59 bps equal to $942 of new notes with $120 in cash, for a total exchange price of $1,062;

• All of the $554,956,000 tendered of the $993,675,000 of 5.125% notes due Oct. 1, 2023 (Cusips: 05401AAB7, G0686BAB5) issued by Avolon Holdings Funding with pricing based on the 0.125% Treasury note due July 31, 2023 plus 74 bps for a total exchange price of $1,084.27;

• $419,727,000, or 72.05%, of the $582,735,000 tendered of the $1,192,644,000 of 5.5% notes due Feb. 15, 2024 (Cusips: 70014LAB6, G6935LAB9) issued by Park with pricing based on the 0.375% Treasury note due July 15, 2024 plus 75 bps for a total exchange price of $1,106.91;

• None of the $557,918,000 tendered of the $879,963,000 of 4.5% notes due March 15, 2023 (Cusips: 70014LAC4, G6935LAC7) issued by Park with pricing based on the 0.125% Treasury note due July 31, 2023 plus 66 bps for a total exchange price of $1,053.88;

• None of the $333,701,000 tendered of the $740,072,000 of 5.25% notes due May 15, 2024 (Cusips: 05401AAD3, G0686BAC3) issued by Avolon Holdings Funding with pricing based on the 0.375% Treasury note due July 15, 2024 plus 80 bps for a total exchange price of $1,106.03;

• None of the $519,938,000 tendered of the $977,179,000 of 3.95% notes due July 1, 2024 (Cusips: 05401AAF8, G0686BAE9) issued by Avolon Holdings Funding with pricing based on the 0.375% Treasury note due July 15, 2024 plus 80 bps for a total exchange price of $1,075.53; and

• None of the $396,274,000 tendered of the $650 million of 5.5% notes due Jan. 15, 2026 (Cusips: 05401AAK7, G0686BAJ8) issued by Avolon Holdings Funding with pricing based on the 0.625% Treasury note due July 31, 2026 plus 120 bps for a total exchange price of $1,147.54.

Pricing will be set based on $1,000 principal amount per note.

In each case, the total consideration includes an early participation payment of $30 of new notes per $1,000 principal amount. Holders will also receive accrued interest.

As a condition, the combination of the yield of the new notes and the total exchange price for the applicable series of old notes must not result in the new notes and such old notes being treated as “substantially different” under FASB Accounting Standards code. Also, only with respect to any validly tendered old notes not settled on the early settlement date, there is a tax condition, which is satisfied as long as Avolon Holdings Funding determines that it is highly likely that the new notes issuable in exchange for old notes will be issued in a “qualified reopening” for U.S. federal income tax purposes.

There was also a $500 million minimum tender condition.

As all conditions have been met or waived as of the early participation date, Avolon expects to settle all notes validly tendered and accepted for purchase by the early participation date on Aug. 18.

Because the amount of notes tendered is expected to equal the new notes cap, Avolon does not expect to accept any more tendered notes.

The expiration time was officially 11:59 p.m. ET on Aug. 27, and there is not an expected final settlement date.

Global Bondholder Services Corp. (866 470-3800 or 212 430-3774) is the information agent and the exchange agent.

Avolon is a Dublin-based provider of aircraft leasing and lease management services.

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