| Item 1.01 | Entry into a Material Definitive Agreement |
On July 18, 2024, Aircastle Limited (“Aircastle”) and Aircastle (Ireland) Designated Activity Company, a wholly-owned subsidiary of Aircastle (“AIDAC” and, together with Aircastle, the “Issuers”), issued $500 million aggregate principal amount of the Issuers’ 5.750% Senior Notes due 2031 (the “Notes”) pursuant to an Indenture, dated as of July 18, 2024 (the “Indenture”), among the Issuers and Computershare Trust Company, N.A., as trustee for the Notes.
The Notes will mature on October 1, 2031. Interest on the Notes will be payable semi-annually in arrears on April 1 and October 1, beginning on April 1, 2025, at a rate of 5.750% per annum. The Issuers intend to use the net proceeds from the sale of the Notes for general corporate purposes, which may include the acquisition of aircraft, as well as refinancing a portion of Aircastle’s existing indebtedness.
Prior to August 1, 2031, the Issuers may redeem the Notes, in whole or in part, at any time and from time to time, by paying a specified “make-whole” premium, plus accrued and unpaid interest, if any, to, but not including, the redemption date. On and after August 1, 2031, the Issuers may redeem the Notes, in whole or in part, at any time and from time to time, at a redemption price of 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date.
If a Change of Control Triggering Event (as defined in the Indenture) occurs, the Issuers will be required to make an offer to purchase each holder’s Notes at a price of 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date of purchase.
The Indenture contains covenants that, among other things, restrict Aircastle and its subsidiaries’ (subject to certain exceptions) ability to incur liens that secure obligations under indebtedness for borrowed money or capitalized lease obligations and consolidate, amalgamate, merge, sell or otherwise dispose of all or substantially all of its assets.
The Indenture also provides for customary events of default, including non-payment of principal, interest or premium, failure to comply with covenants, and certain bankruptcy or insolvency events.
The foregoing is qualified in its entirety by reference to the Indenture, attached as Exhibit 4.1 hereto and incorporated herein by reference.
The Notes have not been and will not be registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption therefrom.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The information included in Item 1.01 is incorporated herein by reference.
Press Release
On July 15, 2024, Aircastle issued a press release announcing the pricing of the offering of the Notes. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
AIDAC Guarantees
In in connection with AIDAC co-issuing the Notes with Aircastle, AIDAC agreed to fully and unconditionally guarantee (the “AIDAC Guarantees”) Aircastle’s obligations under Aircastle’s (i) 5.250% senior notes due 2025, (ii) 4.250% senior notes due 2026, (iii) 2.850% senior notes due 2028, (iv) 6.500% senior note due 2028 and (v) 5.950% senior notes due 2029 (collectively, the “Existing Notes”). As a result of the AIDAC Guarantees, the Notes rank pari passu in right of payment with the Existing Notes.
