AerCo launches consent solicitation for five classes of notes

By Angela McDaniels

Tacoma, Wash., Oct. 12 - AerCo Ltd. began a consent solicitation for its class A notes, class B notes, class C notes, class D notes and class E notes, according to a company filing with the London Stock Exchange.

The proposed amendments require the consent of the holders of at least a majority of the outstanding principal balance of the notes, voting as a single class. As of Sept. 15, the most recent payment date, the outstanding principal balance of the notes was $824,150,859.

The company is not offering a consent fee.

AerCo said the overall purpose of the proposed amendments is to reduce the costs of insuring its aircraft and to eliminate the time delay and costs associated with obtaining confirmation or approval from the rating agencies of certain actions.

The proposed amendments would

• Reduce the minimum amount of hull insurance and PRI coverage that AerCo is required to carry on each aircraft to an amount that is at least equal to the most recent appraised base value of such aircraft; and

• Remove the requirement that AerCo obtains confirmation from Standard & Poor's, Moody's Investors Service and Fitch Ratings that a specified action or event will not result in a downgrade or withdrawal of that agency's rating of a subclass of notes or, in some cases, the approval from each agency prior to taking actions for which that agency confirmation or approval is currently required, including, among other provisions, creating certain encumbrances over leases, making certain changes to AerCo's hedging policy, making certain investments, entering into any primary eligible credit facility, consummating a merger, consolidating or transferring all or substantially all of AerCo's assets, entering into leases not denominated in dollars, changing the level of airline liability insurance required for each aircraft and entering into a swap agreement with a new counterparty.

The proposed amendments would replace the requirement for agency confirmation or approval from each agency with a requirement for prior written notification to each agency of the proposed action. All such proposed actions would continue to require approval of the board.

The information agent is Global Restructuring Services, Inc. Consents must be submitted to Global Restructuring Services' John Baxter (212 644-1772 or fax 212 937-3653) by noon ET on Nov. 16.

The solicitation agent is R.W. Pressprich & Co. (contact Steve Welo at 763 252-1650 or swelo@pressprich.com or Clay Smith at 763 252-1654 or csmith@pressprich.com).

AerCo distributes electrical components, electrical connectors and electrical switches to manufacturers and service companies. It is based in Horsham, England.

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