AerCap Holdings N.V. Announces Pricing of $1.5 Billion Aggregate Principal Amount of Senior Notes

Rhea-AI Summary

AerCap Holdings N.V. (AER) priced an offering of senior notes, consisting of $800 million aggregate principal amount of the Issuers' 5.100% Senior Notes due 2029 and $700 million aggregate principal amount of the Issuers' 5.300% Senior Notes due 2034. The net proceeds from the Notes will be used for general corporate purposes, including to acquire, invest in, finance or refinance aircraft assets and to repay indebtedness.

Positive

• AerCap Holdings N.V. successfully priced an offering of senior notes, raising a substantial amount of funds for general corporate purposes.
• The net proceeds from the offering will be used to acquire, invest in, finance or refinance aircraft assets and to repay indebtedness, indicating a strategic use of funds for business growth and financial stability.

Negative

• None.

Financial Analyst

The recent pricing of senior notes by AerCap Holdings N.V.'s subsidiaries is a strategic financial move aimed at bolstering the company's liquidity and optimizing its capital structure. By issuing $800 million of the 2029 Notes and $700 million of the 2034 Notes, AerCap is taking advantage of the current interest rate environment to secure long-term financing. The specified use of proceeds for general corporate purposes, including refinancing of debt and investment in aircraft assets, indicates a proactive approach to managing the company's obligations and growth prospects.

Investors should note the interest rates of 5.100% and 5.300% for the 2029 and 2034 Notes, respectively, which reflect the risk premium and market conditions at the time of issuance. The discount at which the notes are issued also implies an immediate market perception of the notes' value versus their nominal value. The guarantee by AerCap and certain subsidiaries adds a layer of security for note holders, potentially making the notes more attractive to risk-averse investors.

It's important to consider the potential impact on AerCap's balance sheet and debt profile. The additional debt will increase the company's leverage ratios, which could affect its credit ratings and borrowing costs in the future. However, if the proceeds are used effectively to generate higher returns or to refinance existing debt at higher interest rates, the transaction could be accretive to the company's financial health in the long run.

Market Research Analyst

The offering of senior notes by AerCap is indicative of the broader trends in the aviation financing industry. The sector has seen a significant need for capital to support fleet expansions and renewals, driven by the post-pandemic recovery in air travel demand. AerCap's move to secure funding through the capital markets demonstrates confidence in the aviation sector's recovery and the company's ability to deploy capital effectively.

The involvement of top-tier financial institutions such as Citigroup and Goldman Sachs as joint book-running managers signals strong market support for AerCap's offering. This could potentially influence investor sentiment positively, as the backing by reputable underwriters often correlates with successful bond issues. Moreover, the timing of the offering may capitalize on investor appetite for corporate debt, particularly in industries poised for growth as global travel continues to rebound.

For stakeholders in the aviation industry, this issuance provides insights into the cost of capital and the appetite for aviation-related debt. A successful placement of the notes could encourage other industry players to consider similar financing strategies, potentially increasing competition for capital and influencing borrowing costs.

Legal Expert

The legal framework surrounding the issuance of the senior notes by AerCap's subsidiaries is crucial for ensuring regulatory compliance and investor protection. The registration of the offering with the U.S. Securities and Exchange Commission (SEC) and the automatic effectiveness of the registration statement highlight the adherence to SEC regulations that govern public offerings.

Investors should pay close attention to the prospectus and the preliminary prospectus supplement, which provide detailed information about the terms of the notes, the risks involved and the legal obligations of the issuers and guarantors. The guarantee by AerCap and certain subsidiaries is a legal commitment that enhances the creditworthiness of the notes, which is an essential consideration for potential investors.

The legal structuring of the notes as senior unsecured obligations indicates that they rank higher than other unsecured debt in the event of a default, but do not have the backing of specific collateral. This positioning within the company's capital hierarchy affects the risk profile of the investment and should be analyzed in the context of the company's overall debt structure and asset base.

DUBLIN, Jan. 4, 2024 /PRNewswire/ -- On January 4, 2024, AerCap Ireland Capital Designated Activity Company and AerCap Global Aviation Trust (together, the "Issuers"), each a wholly-owned subsidiary of AerCap Holdings N.V. ("AerCap" or the "Company"), priced an offering of senior notes, consisting of $800 million aggregate principal amount of the Issuers' 5.100% Senior Notes due 2029 (the "2029 Notes"), issued at a price to the public of 98.819%, and $700 million aggregate principal amount of the Issuers' 5.300% Senior Notes due 2034 (the "2034 Notes" and, together with the 2029 Notes, the "Notes"), issued at a price to the public of 97.729%. The Notes will be fully and unconditionally guaranteed on a senior unsecured basis by the Company and certain other subsidiaries of the Company. The Issuers intend to use the net proceeds from the Notes for general corporate purposes, including to acquire, invest in, finance or refinance aircraft assets and to repay indebtedness.

Citigroup, Goldman Sachs & Co. LLC, Morgan Stanley, MUFG and Truist Securities are serving as joint book-running managers for the underwritten public offering.

The Company has filed a registration statement (including a prospectus) on Form F-3 with the U.S. Securities and Exchange Commission (the "SEC") for the underwritten offering to which this communication relates. The registration statement automatically became effective upon filing on October 19, 2021. Investors should read the accompanying prospectus dated October 19, 2021, the preliminary prospectus supplement relating to the offering dated January 4, 2024, and other documents the Company has filed with the SEC for more complete information about the Company and this offering.

These documents may be obtained for free by visiting EDGAR on the SEC's website at www.sec.gov. The prospectus supplement and accompanying prospectus relating to this offering may also be obtained from: Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at 1-800-831-9146 or by email: prospectus@citi.com; Goldman Sachs & Co. LLC, Attn: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316, or by emailing prospectus-ny@ny.email.gs.com; Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, New York 10014, Attention: Prospectus Department; MUFG Securities Americas Inc., Attention: Capital Markets Group, 1221 Avenue of the Americas, 6th Floor, New York, New York 10020, by telephone at 1-877-649-6848; or Truist Securities, Inc., 303 Peachtree Street, Atlanta, Georgia 30308, Attention: Prospectus Department, or by calling toll-free at 1-800-685-4786.

This press release shall not constitute an offer to sell or purchase or the solicitation of an offer to sell or purchase the Notes or any other securities, nor shall there be any offer, solicitation, purchase or sale of these securities in any state or jurisdiction in which such offer, solicitation, purchase or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About AerCap

AerCap is the global leader in aviation leasing with one of the most attractive order books in the industry. AerCap serves approximately 300 customers around the world with comprehensive fleet solutions. AerCap is listed on the New York Stock Exchange (AER) and is based in Dublin with offices in Shannon, Miami, Singapore, Memphis, Amsterdam, Shanghai, Dubai, Seattle, Toulouse and other locations around the world.

Forward-Looking Statements

This press release contains certain statements, estimates and forecasts with respect to future performance and events. These statements, estimates and forecasts are "forward-looking statements". In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as "may," "might," "should," "expect," "plan," "intend," "will," "aim," "estimate," "anticipate," "believe," "predict," "potential" or "continue" or the negatives thereof or variations thereon or similar terminology. All statements other than statements of historical fact included in this press release are forward-looking statements and are based on various underlying assumptions and expectations and are subject to known and unknown risks, uncertainties and assumptions, and may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied in the forward-looking statements, including, among other things, the availability of capital to us and to our customers and changes in interest rates; the ability of our lessees and potential lessees to make lease payments to us; our ability to successfully negotiate flight equipment (which includes aircraft, engines and helicopters) purchases, sales and leases, to collect outstanding amounts due and to repossess flight equipment under defaulted leases, and to control costs and expenses; changes in the overall demand for commercial aviation leasing and aviation asset management services; the continued impacts of the Ukraine Conflict, including the resulting sanctions by the United States, the European Union, the United Kingdom and other countries, on our business and results of operations, financial condition and cash flows; the rate of recovery in air travel related to the Covid-19 pandemic, the aviation industry and global economic conditions; the potential impacts of the pandemic and responsive government actions on our business and results of operations, financial condition and cash flows; the effects of terrorist attacks on the aviation industry and on our operations; the economic condition of the global airline and cargo industry and economic and political conditions; development of increased government regulation, including travel restrictions, sanctions, regulation of trade and the imposition of import and export controls, tariffs and other trade barriers; the impact of current hostilities in the Middle East, or any escalation thereof, on the aviation industry or our business; a downgrade in any of our credit ratings; competitive pressures within the industry; regulatory changes affecting commercial flight equipment operators, flight equipment maintenance, engine standards, accounting standards and taxes.

As a result, we cannot assure you that the forward-looking statements included in this press release will prove to be accurate or correct. These and other important factors and risks are discussed in AerCap's annual report on Form 20-F and other filings with the SEC. In light of these risks, uncertainties and assumptions, the future performance or events described in the forward-looking statements in this press release might not occur. Accordingly, you should not rely upon forward-looking statements as a prediction of actual results and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. Except as required by applicable law, we do not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

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SOURCE AerCap Holdings N.V.

FAQ

What is the offering price of the 2029 Notes and the 2034 Notes by AerCap Holdings N.V.?

The offering consists of $800 million aggregate principal amount of the Issuers' 5.100% Senior Notes due 2029, issued at a price to the public of 98.819%, and $700 million aggregate principal amount of the Issuers' 5.300% Senior Notes due 2034, issued at a price to the public of 97.729%.

What will the net proceeds from the Notes be used for?

The net proceeds from the Notes will be used for general corporate purposes, including to acquire, invest in, finance or refinance aircraft assets and to repay indebtedness.

Who are the joint book-running managers for the underwritten public offering?

Citigroup, Goldman Sachs & Co. LLC, Morgan Stanley, MUFG, and Truist Securities are serving as joint book-running managers for the underwritten public offering.

When did the registration statement for the underwritten offering become effective?

The registration statement automatically became effective upon filing on October 19, 2021.

What documents should investors read for more complete information about the offering?

Investors should read the accompanying prospectus dated October 19, 2021, the preliminary prospectus supplement relating to the offering dated January 4, 2024, and other documents the Company has filed with the SEC for more complete information.