Obligation Air Lease Corp 4.25% ( US00912XAN49 ) en USD

Air Lease Corp

99.654 % ▲

Etats-unis

US00912XAN49 ( en USD )

4.25% par an ( paiement semestriel )

14/09/2024

Prospectus brochure de l'obligation Air Lease Corp US00912XAN49 en USD 4.25%, échéance 14/09/2024

2 000 USD

500 000 000 USD

00912XAN4

BBB ( Qualité moyenne inférieure )

N/A

15/09/2024 ( Dans 50 jours )

L'Obligation émise par Air Lease Corp ( Etats-unis ) , en USD, avec le code ISIN US00912XAN49, paye un coupon de 4.25% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 14/09/2024
L'Obligation émise par Air Lease Corp ( Etats-unis ) , en USD, avec le code ISIN US00912XAN49, a été notée BBB ( Qualité moyenne inférieure ) par l'agence de notation Standard & Poor's ( S&P ).

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TABLE OF CONTENTS
TABLE OF CONTENTS
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-184382
CALCULATION OF REGISTRATION FEE

Proposed
Proposed
Maximum
Maximum
Title of Each Class of
Amount to be
Offering Price
Aggregate
Amount of
Securities to be Registered

Registered

per Unit

Offering Price

Registration Fee(1)

2.125% Senior Notes due
2018

$500,000,000

99.650%

$498,250,000

$64,174.60

4.250% Senior Notes due
2024

$500,000,000

99.196%

$495,980,000

$63,882.22

Total

$1,000,000,000

$994,230,000

$128,056.82

(1)
The filing fee is calculated in accordance with Rule 457(r) and Rule 457(o) of the Securities Act of 1933, as amended, by multiplying the
proposed maximum aggregate offering price of the securities offered by the fee payment rate in effect on the date of fee payment.
Table of Contents
PROSPECTUS SUPPLEMENT
(To prospectus dated October 11, 2012)
$1,000,000,000
Air Lease Corporation
$500,000,000 2.125% Senior Notes due 2018
$500,000,000 4.250% Senior Notes due 2024
We are offering $500,000,000 aggregate principal amount of 2.125% Senior Notes due 2018, or the 2018 notes, and $500,000,000 aggregate
principal amount of 4.250% Senior Notes due 2024, or the 2024 notes. We refer to the 2018 notes and the 2024 notes collectively as the notes. We will
pay interest on the 2018 notes on January 15 and July 15 of each year, beginning on January 15, 2015. We will pay interest on the 2024 notes on
March 15 and September 15 of each year, beginning on March 15, 2015. The 2018 notes will mature on January 15, 2018. The 2024 notes will mature
on September 15, 2024. We may redeem the notes at our option, in whole or in part, at any time and from time to time, at the redemption prices
described in this prospectus supplement under "Description of Notes--Optional Redemption." If a Change of Control Repurchase Event, as defined
herein, occurs, unless we have exercised our option to redeem the notes, holders of the notes may require us to repurchase the notes at the price
described in this prospectus supplement under "Description of Notes--Repurchase Upon Change of Control Repurchase Event."
The notes will be general unsecured senior obligations and rank equally in right of payment with our existing and future unsecured senior
indebtedness. The notes will be issued only in registered form in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
The notes are a new issue of securities with no established trading market. We do not intend to list the notes on any national securities exchange or
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include the notes in any automated quotation system.
Investing in the notes involves certain risks. See "Risk Factors" beginning on page S-6 of this prospectus
supplement and those incorporated by reference herein to read about certain factors you should consider before
buying the notes.

Per 2018 Note

Total

Per 2024 Note

Total

Public offering price(1)

99.650%

$498,250,000

99.196%

$495,980,000

Underwriting discount

0.450%

$2,250,000

0.650%

$3,250,000

Proceeds, before expenses, to us(1)
99.200%

$496,000,000

98.546%

$492,730,000

(1)
Plus accrued interest from September 16, 2014 if settlement occurs after that date.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or
determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The notes will be ready for delivery in book-entry form only through the facilities of The Depository Trust Company for the accounts of its
participants, including Clearstream Banking, société anonyme, and Euroclear Bank S.A./N.V., as operator of the Euroclear System, against payment in
New York, New York on or about September 16, 2014 which is the fifth business day following the date of this prospectus supplement.
Joint Book-Running Managers
BofA Merrill Lynch
Credit Suisse
J.P. Morgan
RBC Capital Markets
BMO Capital
BNP PARIBAS
Citigroup
Deutsche Bank
Mizuho
Markets
Securities
Securities

Morgan Stanley
RBS

SunTrust Robinson
Wells Fargo
Humphrey
Securities
Prospectus Supplement dated September 9, 2014.
Table of Contents
You should rely only on the information contained in or incorporated by reference in this prospectus supplement, the accompanying
prospectus and in any free writing prospectus prepared by us or on our behalf. We have not, and the underwriters have not, authorized anyone
to provide you with any information that is different or to make any different or additional representations. We are not making any offer to
sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained or
incorporated by reference in this prospectus supplement, the accompanying prospectus or in any free writing prospectus prepared by us or on
our behalf is accurate as of any date other than their respective dates. Our business, financial condition, results of operations and prospects
may have changed since those dates.
TABLE OF CONTENTS
Prospectus Supplement

Page

About this Prospectus Supplement
S-ii
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Forward-Looking Statements
S-ii
Summary
S-1
Risk Factors
S-6
Use of Proceeds
S-12
Capitalization
S-13
Ratio of Earnings to Fixed Charges
S-14
Description of Notes
S-15
Book-Entry, Delivery and Form
S-28
Material United States Federal Income Tax Considerations
S-31
Certain Considerations Applicable to ERISA, Governmental and Other Plan Investors
S-36
Underwriting
S-37
Legal Matters
S-42
Experts
S-42
Where You Can Find More Information
S-42
Incorporation by Reference
S-43
Prospectus
Risk Factors

3
Forward-Looking Statements

3
About This Prospectus

3
Where You Can Find More Information

4
Incorporation by Reference

4
Description of Air Lease Corporation

5
Ratios of Earnings to Fixed Charges

6
Use of Proceeds

6
Description of Debt Securities

6
Description of Capital Stock

11
Description of Warrants

15
Description of Depositary Shares

16
Description of Rights

19
Description of Purchase Contracts

20
Description of Units

21
Plan of Distribution

22
Legal Matters

22
Experts

22
S-i
Table of Contents
ABOUT THIS PROSPECTUS SUPPLEMENT
This document consists of two parts. The first part is this prospectus supplement, which describes the specific terms of this offering, the notes and
matters relating to us and our financial performance and condition. The second part is the accompanying prospectus, which provides a more general
description of the terms and conditions of the various securities we may offer under our registration statement on Form S-3 that we filed with the
Securities and Exchange Commission (the "SEC") utilizing a "shelf" registration process, some of which may not apply to this offering. If information
in this prospectus supplement is inconsistent with the accompanying prospectus, you should rely on this prospectus supplement.
It is important for you to read and consider all of the information contained in this prospectus supplement and the accompanying prospectus in
making your investment decision. You also should read and consider the information in the documents incorporated by reference in this prospectus
supplement and the accompanying prospectus and the additional information described under "Where You Can Find More Information" on page S-42 of
this prospectus supplement and page 3 of the accompanying prospectus.
When this prospectus supplement uses the terms "Company," "ALC," "we," "our" and "us," they refer to Air Lease Corporation and its consolidated
subsidiaries unless otherwise stated or the context otherwise requires.
FORWARD-LOOKING STATEMENTS
Statements in this prospectus supplement and the accompanying prospectus, including the documents that are incorporated by reference, that are not
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historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements are based on our current
intent, belief and expectations. We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995 for all forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as
"anticipate," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing,"
"expects," "intends," "seeks" and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and
unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Our actual results could
differ materially from those anticipated in such forward- looking statements as a result of several factors more fully described in the section titled "Risk
Factors" beginning on page S-6 of this prospectus supplement and in our most recent Annual Report on Form 10-K, as revised or supplemented by any
subsequent Quarterly Report on Form 10-Q filed with the SEC, and elsewhere in this prospectus supplement, the accompanying prospectus and the
documents that are incorporated by reference in this prospectus supplement and the accompanying prospectus, including the following factors, among
others:
·
our inability to make acquisitions of, or to lease, aircraft on favorable terms;
·
our inability to obtain additional financing on favorable terms, if required, to complete the acquisition of sufficient aircraft as currently
contemplated or to fund the operations and growth of our business;
·
our inability to obtain refinancing prior to the time our respective debts mature;
·
impaired financial condition and liquidity of our lessees;
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·
deterioration of economic conditions, generally, and especially in the commercial aviation industry;
·
increased maintenance, operating or other expenses or changes in the timing thereof;
·
changes in law and the regulatory environment, and in government fiscal and monetary policies, domestic and foreign;
·
our inability to effectively deploy the net proceeds from our capital raising activities, including from the issue of the notes; and
·
potential natural disasters, terrorist attacks and the risk of loss of aircraft and the amount of our insurance coverage, if any, relating
thereto.
All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ
materially from our expectations, and, therefore, you are cautioned not to place undue reliance on such statements. Any forward-looking statements are
qualified in their entirety by reference to the risk factors discussed throughout this prospectus supplement, the accompanying prospectus and the
documents incorporated by reference in this prospectus supplement and the accompanying prospectus. Further, any forward-looking statement speaks
only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after
the date on which the statement is made or to reflect the occurrence of unanticipated events.
S-iii
Table of Contents

SUMMARY
This summary highlights information contained elsewhere or incorporated by reference in this prospectus supplement and the accompanying
prospectus. This summary sets forth the material terms of this offering but does not contain all of the information that you should consider before
deciding to invest in the notes. You should read the entire prospectus supplement and the accompanying prospectus, as well as the documents
incorporated by reference in this prospectus supplement and the accompanying prospectus, carefully before making an investment decision, including
the section titled "Risk Factors" beginning on page S-6 of this prospectus supplement and in our Annual Report on Form 10-K incorporated herein by
reference.
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Air Lease Corporation
Air Lease Corporation is an aircraft leasing company based in Los Angeles, California. We are principally engaged in purchasing new commercial
jet transport aircraft directly from the manufacturers, such as The Boeing Company ("Boeing") and Airbus S.A.S. ("Airbus"), and leasing those aircraft
to airlines throughout the world to generate attractive returns on equity. In addition to our leasing activities, we sell aircraft from our operating lease
portfolio to third parties, including other leasing companies, financial services companies and airlines. We also provide fleet management services to
investors and owners of aircraft portfolios for a management fee. Our operating performance is driven by the growth of our fleet, the terms of our leases,
the interest rates on our indebtedness and the terms of our aircraft sales and trading activities.
We currently have relationships with over 200 airlines across 70 countries. We operate our business on a global basis, providing aircraft to airline
customers in every major geographical region, including markets such as Asia, the Pacific Rim, Latin America, the Middle East and Eastern Europe.
Many of these markets are experiencing increased demand for passenger airline travel and have lower market saturation than more mature markets such
as North America and Western Europe. We expect that these markets will also present significant replacement opportunities in upcoming years as some
airlines in these markets look to replace aging aircraft with new, modern technology, fuel efficient jet aircraft. An important focus of our strategy is
meeting the needs of this replacement market. Airlines in some of these markets have fewer financing alternatives, enabling us to command relatively
higher lease rates compared to those in more mature markets.
We mitigate the risks of owning and leasing aircraft through careful management and diversification of our leases and lessees by geography, lease
term, and aircraft age and type. We believe that diversification of our operating lease portfolio reduces the risks associated with individual lessee
defaults and adverse geopolitical and regional economic events. We mitigate the risks associated with cyclical variations in the airline industry by
managing customer concentrations and lease maturities in our operating lease portfolio to minimize periods of concentrated lease expirations. In order
to maximize residual values and minimize the risk of obsolescence, our strategy is to own an aircraft during the first third of its 25 year useful life.
As of June 30, 2014, we owned 207 aircraft in our operating lease portfolio and we leased the aircraft to a globally diversified customer base
comprised of 77 airlines in 47 countries. The weighted average lease term remaining of our operating lease portfolio was 7.2 years and the weighted
average age of our fleet was 3.6 years. During 2014 we have entered into commitments to purchase 95 additional aircraft from Airbus, Boeing and
Avions de Transport Régional ("ATR"). From Airbus, we have agreed to purchase 60 additional A321neo aircraft and one Airbus A330-300 aircraft.
From Boeing, we have agreed to purchase six additional 777-300ER aircraft, one additional 737-800 aircraft, and confirmed the purchase of 20 737-8/9
MAX aircraft which were previously subject to reconfirmation. From ATR, we have agreed to purchase seven additional ATR 72-600 aircraft. As of
June 30, 2014 and through August 7, 2014 (when our most recent Quarterly Report on Form 10-Q was

S-1
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filed with the SEC), we had, in the aggregate, 379 aircraft on order with Boeing, Airbus and ATR for delivery through 2023, with an estimated
aggregate purchase price of $29.8 billion, making us one of the largest customers of Boeing and Airbus.
As of June 30, 2014, all of our 207 aircraft were leased. As of June 30, 2014 and through August 7, 2014, we have signed lease agreements for 92
aircraft that we ordered from the manufacturers for delivery through 2023.
We finance the purchase of aircraft and our business with available cash balances, internally generated funds, including aircraft sales and trading
activity, and debt financings. Our debt financing strategy is focused on raising unsecured debt in the global bank and capital markets, with a limited
utilization of export credit financing. In 2013, the Company received two corporate credit ratings lowering our cost of funds and broadening our access
to attractively priced capital. Since our inception in 2010, we have developed a globally diversified group of banking relationships that currently
includes 43 financial institutions, which have provided us in excess of $4.2 billion in financing, and we have raised $3.8 billion in financing in the
capital markets. We ended the second quarter of 2014 with total debt outstanding of $6.3 billion, of which 65.6% was at a fixed rate and 79.4% of
which was unsecured, with a composite cost of funds of 3.59%.
For the three months ended June 30, 2014, we had total revenues of $256.3 million, representing an increase of $48.4 million or 23.3% compared
to $207.9 million for the three months ended June 30, 2013. This is comprised of rental revenues on our operating lease portfolio of $242.5 million and
aircraft sales, trading and other revenue of $13.8 million. We recorded earnings before income taxes of $95.7 million for the three months ended
June 30, 2014 compared to $66.3 million for the three months ended June 30, 2013, an increase of $29.4 million or 44.3%.
For the six months ended June 30, 2014, we had total revenues of $502.6 million, representing an increase of $102.7 million or 25.7% compared to
$399.9 million for the six months ended June 30, 2013. This is comprised of rental revenues on our operating lease portfolio of $472.9 million and
aircraft sales, trading and other revenue of $29.7 million. We recorded earnings before income taxes of $190.4 million for the six months ended
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June 30, 2014 compared to $128.0 million for the six months ended June 30, 2013, an increase of $62.4 million or 48.8%.
Air Lease Corporation is incorporated in Delaware. Our principal executive office is located at 2000 Avenue of the Stars, Suite 1000N, Los
Angeles, California 90067. Our telephone number is (310) 553-0555 and our website is www.airleasecorp.com. Information included or referred to on,
or otherwise accessible through, our website is not intended to form a part of or be incorporated by reference into this prospectus supplement or the
accompanying prospectus.

S-2
Table of Contents

The Offering
The summary below describes the principal terms of the notes. Certain of the terms and conditions described below are subject to important
limitations and exceptions. The "Description of Notes" section of this prospectus supplement contains a more detailed description of the terms and
conditions of the notes. As used in this section "Summary--The Offering," "the Company," "we," "our," and "us" refer to Air Lease Corporation only
and not to its subsidiaries.
Issuer
Air Lease Corporation, a Delaware corporation.

Securities
$500 million aggregate principal amount of 2.125% senior notes due 2018 (the "2018 notes") and
$500 million aggregate principal amount of 4.250% senior notes due 2024 (the "2024 notes" and collectively
with the 2018 notes, the "notes").

Maturity
The 2018 notes will mature on January 15, 2018. The 2024 notes will mature on September 15, 2024.

Offering Price
99.650% of principal amount plus accrued interest, if any, from September 16, 2014 for the 2018 notes and
99.196% of principal amount plus accrued interest, if any, from September 16, 2014 for the 2024 notes.

Interest Rate
2.125% per annum for the 2018 notes and 4.250% per annum for the 2024 notes.

Interest Payment Dates
January 15 and July 15, commencing January 15, 2015 for the 2018 notes and March 15 and September 15,
commencing March 15, 2015 for the 2024 notes.

Record Payment Dates
Every January 1 and July 1 preceding each interest payment date for the 2018 notes and every March 1 and
September 1 preceding each interest payment date for the 2024 notes.

Optional Redemption
We may redeem the notes at our option, in whole or in part at any time and from time to time, on not less
than 30 nor more than 60 days' notice, at the redemption prices described in this prospectus supplement
under "Description of Notes--Optional Redemption."

Change of Control
If a Change of Control Repurchase Event occurs, unless we have exercised our option to redeem the notes
(as described in this prospectus supplement under "Description of Notes--Optional Redemption"), holders
of the notes may require us to repurchase the notes at a specified price. See "Description of Notes--
Repurchase Upon Change of Control Repurchase Event."

Ranking
The notes will be our senior unsecured obligations and will:

· rank senior in right of payment to all of our future subordinated indebtedness;

· rank equally in right of payment with all of our existing and future senior indebtedness;

S-3
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· be effectively subordinated to any of our existing and future secured debt, to the extent of the value of the assets securing such
debt; and

· be structurally subordinated to all of the existing and future indebtedness and other liabilities (including trade payables) of each of
our subsidiaries.

As of June 30, 2014, we and our subsidiaries had $6.3 billion of total indebtedness, and we (excluding our subsidiaries) had
$5.0 billion of unsecured indebtedness.

As of June 30, 2014, assuming the notes had been issued (but without giving effect to the application of the net proceeds we receive
from the offering in the manner described under "Use of Proceeds"):

· we and our subsidiaries would have had approximately $7.3 billion of total indebtedness (including the notes) on a consolidated
basis;

· we (excluding our subsidiaries) would have had approximately $6.0 billion of unsecured indebtedness (including the notes);

· our subsidiaries would have had approximately $1.3 billion of total indebtedness, all of which would have been structurally senior
to the notes;

· we (excluding our subsidiaries) would have had guaranties of subsidiary indebtedness of approximately $741.6 million that were
secured by pledges of our equity in such subsidiaries, and no other secured indebtedness, and a limited unsecured (10%) guarantee
of approximately $553.6 million of subsidiary indebtedness; and

· our subsidiaries would have had commitments of approximately $446.4 million available to borrow under such subsidiaries' various
credit facilities.

Covenants
The supplemental indentures governing each series of notes will include certain restrictions on liens and mergers, consolidations and
transfers of substantially all of our assets. These covenants are subject to important qualifications and exceptions. See "Description of
the Notes--Certain Covenants" in this prospectus supplement.

Absence of
Public
The notes are a new issue of securities with no established trading market. Accordingly, a liquid market for the notes may not
Market for
develop. The underwriters have advised us that they currently intend to make a market in the notes. However, they are not obligated
the Notes
to do so, and any market making with respect to the notes may be discontinued without notice.

S-4
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Use of Proceeds
We estimate that the net proceeds from this offering will be approximately $988.0 million, after deducting
the underwriting discount and estimated offering expenses payable by us. We intend to use the net proceeds
from this offering for general corporate purposes, which may include, among other things, the purchase of
commercial aircraft and the repayment of existing indebtedness. Affiliates of the underwriters may receive a
portion of the net proceeds to the extent we use net proceeds to repay indebtedness under which certain of
the underwriters or their affiliates are lenders.

Form and Denomination
The notes will be issued in fully registered form in denominations of $2,000 and integral multiples of
$1,000 in excess thereof.

Book-Entry Form
The notes will be issued in book-entry form and will be represented by permanent global certificates
deposited with, or on behalf of, The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., DTC's nominee. Beneficial interests in the notes will be shown on, and transfers will be
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effected only through, records maintained by DTC or its nominee; and these interests may not be exchanged
for certificated notes, except in limited circumstances. See "Book-Entry, Delivery and Form."

Trustee
Deutsche Bank Trust Company Americas.

Governing Law
New York.

Risk Factors
In evaluating an investment in the notes, you should carefully consider, along with the other information in
this prospectus supplement, the accompanying prospectus and the documents incorporated by reference in
this prospectus supplement and the accompanying prospectus, the specific factors set forth under "Risk
Factors" beginning on page S-6 of this prospectus supplement and in our Annual Report on Form 10-K
incorporated herein by reference for risks involved with an investment in the notes.

S-5
Table of Contents
RISK FACTORS
An investment in the notes involves certain risks. You should carefully consider the risks described below and in the accompanying prospectus, as
well as the risk factors and other information included or incorporated by reference in this prospectus supplement and the accompanying prospectus
before making an investment decision. Our business, financial condition or results of operations could be materially adversely affected by any of these
risks. The trading price of the notes could decline due to any of these risks, and you may lose all or a substantial part of your investment. This
prospectus supplement also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described or incorporated by
reference in this prospectus supplement and the accompanying prospectus.
Unless the context otherwise requires, as used in this "Risk Factors" section, "we," "our," and "us" refer to Air Lease Corporation only and not to
its subsidiaries. For purposes of this section, the term "indenture" refers to the indenture, dated October 11, 2012, between the Company and Deutsche
Bank Trust Company Americas, as trustee, together with the supplemental indentures that will establish and govern the terms of each series of notes
offered hereby.
Risks Related to the Notes
Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under the notes.
We and our subsidiaries have, and after the offering of the notes will continue to have, a significant amount of indebtedness. As of June 30, 2014,
our total consolidated indebtedness was approximately $6.3 billion.
Subject to the limits contained in the agreements governing our existing and future indebtedness and the indenture, we may be able to incur
substantial additional debt from time to time to finance aircraft, working capital, capital expenditures, investments or acquisitions, and for other
purposes. If we do so, the risks related to our high level of debt could intensify. Specifically, our high level of debt could have important consequences
to the holders of the notes, including the following:
·
making it more difficult for us to satisfy our obligations with respect to the notes and our other debt;
·
limiting our ability to obtain additional financing to fund the acquisition of aircraft or for other corporate requirements;
·
requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the
amount of cash flows available for aircraft acquisitions and other general corporate purposes;
·
increasing our vulnerability to general adverse economic and industry conditions;
·
exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our various credit facilities,
are at variable rates of interest;
·
limiting our flexibility in planning for and reacting to changes in the aircraft industry;
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·
placing us at a disadvantage compared to other competitors; and
·
increasing our cost of borrowing.
In addition, certain agreements governing our existing indebtedness contain financial maintenance covenants that require us to satisfy certain ratios
and maintain minimum net worth, and other restrictive covenants that limit our ability to engage in activities that may be in our long-term best
S-6
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interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, may result in the acceleration of
some or all our debt, including the notes.
We may not be able to generate sufficient cash to service all of our indebtedness, including the notes, and may be forced to take other actions to
satisfy our obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments on or refinance our debt obligations, including the notes, depends on our financial condition and operating
performance, which are subject to prevailing economic and competitive conditions and to financial, business, legislative, regulatory and other factors
beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal of,
premium, if any, or interest on our indebtedness, including the notes.
As of June 30, 2014, after giving effect to this offering, we would have had approximately $7.3 billion in consolidated debt outstanding, and we
expect this amount to grow as we acquire more aircraft. Unless extended or refinanced, the substantial majority of our outstanding indebtedness matures
or fully amortizes before the maturity of the notes offered hereby. If our cash flows and capital resources are insufficient to fund our debt service
obligations, and if we are unable to refinance our maturity debt on acceptable terms, we could face substantial liquidity problems and could be forced to
reduce or delay aircraft purchases or to dispose of material assets or leases, or seek additional debt or equity capital or to restructure our indebtedness,
including the notes. We may not be able to effect timely any such alternative measures on commercially reasonable terms or at all and, even if
successful, those alternative actions may not allow us to meet our scheduled debt service obligations. Certain agreements governing our existing
indebtedness restrict our ability to dispose of assets and use the proceeds from those dispositions. We may not be able to consummate those
dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources--Debt" and "--Contractual Obligations" and Note 2 to our
Consolidated Financial Statements, each in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which is incorporated by
reference in the prospectus supplement.
In addition, we conduct substantially all of our operations through our subsidiaries, which hold substantially all our aircraft. None of our
subsidiaries will guarantee or otherwise be obligated to pay any of our obligations under the notes. For the six months ended June 30, 2014, our
subsidiaries generated substantially all of our consolidated revenue and operating cash flow. As of June 30, 2014, our subsidiaries held 100% of our
aircraft assets and had approximately $1.3 billion of total indebtedness, all of which is structurally senior to the notes, and we have provided a limited
(10%) unsecured guarantee of approximately $553.6 million of one of our subsidiary warehouse facilities. Our subsidiaries do not have any obligation
to pay amounts due on the notes or to make funds available for that purpose; however, our subsidiaries have covenanted to become guarantors of certain
of our other outstanding indebtedness in certain circumstances and may in the future guarantee other indebtedness of ours. Repayment of our
indebtedness, including the notes, is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by
dividends, distributions or otherwise. Our subsidiaries may not be able to, or may not be permitted to, make distributions to us sufficient to enable us to
make payments in respect of our indebtedness, and to the extent our subsidiaries have provided guarantees of our other indebtedness, the notes will be
structurally subordinated to such guaranteed indebtedness. Each subsidiary is a distinct legal entity, and legal and contractual restrictions may limit our
ability to obtain cash from our subsidiaries. In the event that we do not receive distributions from our subsidiaries, we may be unable to make required
principal and interest payments on our indebtedness, including the notes. For additional risks related to our subsidiaries' ability to make payments and
distributions to us, see the risk factor titled "Certain of our subsidiaries may be restricted in their ability to make distributions to us which would
negatively affect
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our financial condition and cash flow" in our Annual Report on Form 10-K incorporated herein by reference. Also, as of June 30, 2014, we had pledged
our interests in our subsidiaries to secure our guarantees of approximately $741.6 million of subsidiary indebtedness. Any foreclosure on these interests
by our lenders could reduce our cash available to pay our obligations under the notes.
Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or
at all, would materially and adversely affect our financial position and results of operations and our ability to satisfy our obligations under the notes.
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If we cannot make scheduled payments on our indebtedness, we will be in default and holders of our debt securities or our lenders, as applicable,
may be able to declare such indebtedness to be due and payable, terminate commitments to lend money, foreclose against the assets, if any, securing
such indebtedness or pursue other remedies, including potentially forcing us into bankruptcy or liquidation. All of these events could result in you losing
your entire investment in the notes.
The limited covenants applicable to the notes may not provide protection against some events or developments that may affect our ability to repay
the notes or the trading prices for the notes.
The indenture governing the notes, among other things, does not:
·
require us to maintain any financial ratios or specific levels of net worth, revenues, income, cash flow or liquidity and, accordingly, does
not protect holders of the notes in the event that we experience significant adverse changes in our financial condition or results of
operations;
·
limit our ability to incur indebtedness, including secured indebtedness (subject to compliance with the lien covenant), that is senior to or
equal in right of payment to the notes;
·
limit our subsidiaries' ability to incur secured (subject to compliance with the lien covenant) or unsecured indebtedness, which would be
structurally senior to the notes;
·
restrict our ability to repurchase or prepay our securities; or
·
restrict our ability to make investments or to repurchase or pay dividends or make other payments in respect of our common stock or
other securities ranking junior to the notes.
For these reasons, you should not consider the lien or merger and consolidation covenants in the indenture as significant factors in evaluating
whether to invest in the notes.
Negative changes in our credit ratings may limit our ability to secure financing, increase our borrowing costs and adversely affect the market value
and liquidity of your notes.
We are currently subject to periodic review by independent credit rating agencies Standard & Poor's Rating Services ("S&P") and Kroll Bond
Rating Agency ("Kroll"), each of which currently maintains investment grade credit ratings with respect to our Company and certain of our debt
securities, and we may become subject to periodic review by other independent credit rating agencies in the future. An increase in the level of our
outstanding indebtedness, or other events that could have an adverse impact on our business, properties, financial condition, results of operations or
prospects, may cause S&P or Kroll, or, in the future, other rating agencies, to downgrade or withdraw our debt credit rating generally, and/or the ratings
on the notes, which could adversely impact the trading prices for, and/or the liquidity of, the notes.
The credit ratings assigned to the notes are limited in scope, and do not address all material risks relating to an investment in the notes, but rather
reflect only the view of the applicable rating agency at the time the rating is issued. We cannot assure you that these credit ratings will remain in effect
for any given period of time or that a rating will not be lowered, suspended or withdrawn entirely by the applicable rating agency, if, in such rating
agency's sole judgment, circumstances so warrant. Ratings
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are not a recommendation to buy, sell or hold any security. Each agency's rating should be evaluated independently of any other agency's rating. Actual
or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under further review for a downgrade, could
affect the trading prices for, or liquidity of, the notes, increase our corporate borrowing costs and limit our access to the capital markets and result in
more restrictive covenants in future debt agreements.
The notes will be effectively subordinated to our secured indebtedness to the extent of the value of the property securing that indebtedness.
The notes will not be secured by any of our or our subsidiaries' assets. As a result, the notes will be effectively subordinated to our and such
subsidiary's indebtedness with respect to the assets that secure such indebtedness. As of June 30, 2014, we had guarantees of subsidiary indebtedness of
approximately $741.6 million secured by pledges of the equity of our subsidiaries, and our subsidiaries had approximately $1.3 billion of secured
indebtedness outstanding. In addition, we and our subsidiaries may incur additional secured debt in the future. As a result of this effective subordination,
upon a default in payment on, or the acceleration of, any of this secured indebtedness, or in the event of bankruptcy, insolvency, liquidation, dissolution
or reorganization of our company or any subsidiary or subsidiaries, the proceeds from the sale of assets securing our or our subsidiaries' secured
indebtedness or guarantees will only be available to pay obligations on the notes and other senior unsecured obligations after such secured debt has been
paid in full. Consequently, the holders of the notes may receive less, ratably, than the holders of secured or guaranteed debt in the event of our or our
subsidiaries' bankruptcy, insolvency, liquidation, dissolution or reorganization.
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