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AerCap Holdings N.V. Message Board

  • airlease2000 airlease2000 Sep 24, 2010 10:40 AM Flag

    Borrowing money cheap

    "The second transaction which priced on September 20th, 2010 is related to the closing of the Company's second bond issuance guaranteed by the ECGD. The notes were issued at a fixed rate of 3.215 percent, have a maturity in 2021, and an initial principal amount of $74 million. This transaction completed the refinancing of an A330-300 aircraft which was previously financed by ECA-guaranteed debt provided by Credit Agricole CIB. The respective aircraft was delivered to AerCap in the fourth quarter of 2009 and has been placed on a long-term lease."
    Now this is how to borrow money. Get a guarantee by the ECGD(meaning the ECGD is on the hook if AER defaults) and lock in a fixed rate of 3.215% until 2021. Given the margins on leasing the aircraft - this leaves very good
    return for a long period of time. I wish that I could borrow at 3.215.
    Clearly these guys are SMART!

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    • AER because of it aggressiveness in the darkness of a worldwide recession has put itself in a great position. They continued to make progress payments on their planes ordered and did not cancel them. Their relationship with Airbus has put them in a strong position to get great financing and great discounts. Most of the airlines can't match these costs and will be forced to lease creating demand and better rates(and margins) for AER.
      Interesting that FLY did great their way - AER did great their way. Very different but both resulting in success. AYR at least in the short term is the laggard only because they are competing with two superstars.
      It is going to be an interesting year as indicators are telling us that even with some sluggish growth - airlines, airtravel, and airtransport are growing again.

    • I'm sure it makes money for Aercap, but that's list price for the aircraft. This is also an indirect EU subsidy for Airbus.

    • Maybe someone can tell me why they don't like this new loan and terrific terms? Would have expected share price to be well over $12 as they put 4 new planes out with long term leases in the last 10 days. Jzhands had it right with share price over $15 by yrs end.

    • I can't believe they were able to borrow this cheap. They must love AER's balance sheet. Much more cash in the coffers.

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