Exhibit A
MORGAN STANLEY AIRCRAFT FINANCE
Report to Noteholders
All amounts in US dollars unless otherwise stated
Month May-00
Payment Date 15th of each month
Convention Modified Following Business Day
Current Payment Date 15-May-00
Current Calculation Date 9-May-00
Previous Payment Date 17-Apr-00
Previous Calculation Date 11-Apr-00
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1. Account Activity Summary between Calculation Dates
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Prior Deposits Withdrawals Balance on
Balance Calculation Date
11-Apr-00 9-May-00
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Expense Account 1,646,784.02 5,307,663.04 (5,383,673.06) 1,570,774.00
Collection Account 26,280,531.16 16,680,612.72 (26,280,531.16) 16,680,612.72
Aircraft Purchase Account 19,949,268.44 (19,851,067.07) 98,201.37
Liquidity Reserve cash balance 38,689,203.00 1,456,000.00 - 40,145,203.00
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Total 86,565,786.62 23,444,275.76 (51,515,271.29) 58,494,791.09
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2. Analysis of Expenses Account Activity
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Opening Balance on Previous Calculation Date 1,646,784.02
Transfer from Collection Account on previous Payment Date 1,800,000.00
Permitted Aircraft Accrual
Interim Transfer from Collection Account 3,500,000.00
Interest Income 7,663.04
Balance on current Calculation Date
- Payments on previous payment date (807,450.46)
- Interim payments (4,576,222.60)
- other
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Balance on current Calculation Date 1,570,774.00
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3. Analysis of Collection Account Activity
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Opening Balance on Previous Calculation Date 26,280,531.16
Collections during period
- lease rentals 17,196,232.00
- maintenance reserves 2,095,919.00
- other leasing income 566,882.96
- interest income 321,578.76
- lease rental received in error
- interim transfer to Expense A/C (3,500,000.00)
Transfers from Aircraft Purchase Account -
Drawings under Credit or Liquidity Enhancement Facilities -
Repayment of Drawings under Credit or Liquidity Enhancement Facilities -
Transfer to Expense Account on previous Payment Date
- Required Expense Amount (1,800,000.00)
- Permitted Aircraft Modifications
Net Swap payments on previous Payment Date (567,656.25)
Aggregate Note Payments on previous Payment Date (23,912,874.91)
Interim Transfer to Expense Account
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Balance on current Calculation Date 16,680,612.72
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Analysis of Liquidity Reserve Amount
First Collection Account Reserve 30,000,000.00
Cash Held
- Accrued Expenses 1,570,774.00
- Security Deposits 10,145,203.00 11,715,977.00
Morgan Stanley Facility 30,000,000.00
ILFC Facility
- Letter of Credit 20,000,000.00
-Security Deposits 28,884,039.00 48,884,039.00
-----------------
Liquidity Reserve Amount 120,600,016.00
-----------------
Minimum Liquidity Reserve Amount 30,000,000.00
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Page 1 of 4
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Balance in Collection Account 16,680,612.72
Liquidity Reserve Amount 120,600,016.00
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Available Collections 137,280,628.72
==================
3. Analysis of Collection Account Activity (Continued)
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Analysis of Current Payment Date Distributions
(I) Required Expense Amount 3,665,025.75
(II) a) Class A Interest but excluding Step-up 7,194,686.19
b) Swap Payments other than subordinated swap payments 798,566.67
(iii)a) Repayment of Primary Eligible Credit Facilities -
b) First Collection Account top-up (Minimum liquidity reserve $30 m) 30,000,000.00
(iv) Class A Minimum principal payment -
(v) Class B Interest 888,908.59
(vi) Class B Minimum principal payment 477,216.91
(vii) Class C Interest 1,014,022.50
(viii) Class C Minimum principal payment -
(ix) Class D Interest 797,500.00
(x) Class D Minimum principal payment -
(xi) a) Secondary Eligible Credit Facilities (ILFC and Morgan Stanley Facilities) -
b) Second collection account top-up 90,600,016.00
(xii) Class A Scheduled principal -
(xiii) Class B Scheduled principal 81,822.55
(xiv) Class C Scheduled principal 50,000.00
(xv) Class D Scheduled principal -
(xvi) Permitted accruals for Modifications
(xvii) Step-up interest -
(xviii) Beneficial interest -
(xix) Class A Supplemental principal 1,712,863.55
(xx) Class B Supplemental principal -
(xxi) Class D Redemption Price -
(xxii) Class C Redemption Price -
(xxiii) Class B Redemption Price -
(xxiv) Class A Redemption Price -
(xxv) Subordinated Swap payments -
(xxvi) all remaining amounts to holders of Beneficial interests
Total Payments with respect to Payment Date 137,280,628.72
less collection Account Top Ups (iii) (b) and (xi) (b) above 120,600,016.00
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16,680,612.72
==================
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Page 2 or 4
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4. Payments on the Notes by Subclass
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Subclass Subclass Subclass Subclass Total
Floating Rate Notes A-2 A-3 A-4 A-5 Class A
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Applicable LIBOR 6.13000% 6.13000% 6.13000% 6.13000%
Applicable Margin 0.3500% 0.5200% 0.5400% 0.5800%
Applicable Interest Rate 6.48000% 6.65000% 6.67000% 6.71000%
Day Count Act/360 Act/360 Act/360 Act/360
Actual Number of Days 28 28 28 28
Interest Amount Payable 1,126,640.43 2,999,888.89 1,037,555.56 2,030,601.32
Step-up Interest Amount Payable NA NA NA NA
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Total Interest Paid 1,126,640.43 2,999,888.89 1,037,555.56 2,030,601.32 7,194,686.19
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Expected Final Payment Date 15-Sep-05 15-Mar-02 15-Mar-03 15-Jun-08
Excess Amortisation Date 15-Apr-98 15-Mar-02 15-Mar-03 15-Apr-00
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Original Balance 340,000,000.00 580,000,000.00 200,000,000.00 400,000,000.00
Opening Outstanding Principal Balance 223,539,768.43 580,000,000.00 200,000,000.00 389,086,903.08 1,392,626,671.52
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Extended Pool Factors 81.15% 100.00% 100.00% 100.00%
Pool Factors 72.52% 100.00% 100.00% 96.92%
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Extension Amount - - - -
Pool Factor Amount - - - 1,406,903.08
Surplus Amortisation 111,898.10 - - 194,062.37
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Total Principal Distribution Amount 111,898.10 - - 1,600,965.45 1,712,863.55
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Redemption Amount
- - amount allocable to principal
- - amount allocable to premium
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Closing Outstanding Principal Balance 223,427,870.33 580,000,000.00 200,000,000.00 387,485,937.63 1,390,913,807.96
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Subclass Subclass Total
Floating Rate Notes B-1 B-2 Class B
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Applicable LIBOR 6.1300% 6.1300%
Applicable Margin 0.6500% 1.0500%
Applicable Interest Rate 6.78000% 7.18000%
Day Count Act/360 Act/360
Actual Number of Days 28 28
Interest Amount Payable 470,075.26 418,833.33
Step-up Interest Amount Payable NA NA
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Total Interest Paid 470,075.26 418,833.33 888,908.59
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Expected Final Payment Date 15-Mar-13 15-Mar-07
Excess Amortisation Date 15-Apr-98 15-Mar-07
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Original Balance 100,000,000.00 75,000,000.00
Opening Outstanding Principal Balance 89,141,958.47 75,000,000.00 164,141,958.47
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Extended Pool Factors 95.42% 100.00%
Pool Factors 91.44% 100.00%
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Extension Amount - -
Pool Factor Amount - -
Surplus Amortisation 559,039.46 -
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Total Principal Distribution Amount 559,039.46 - 559,039.46
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Redemption Amount
- - amount allocable to principal
- - amount allocable to premium
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Closing Outstanding Principal Balance 88,582,919.01 75,000,000.00 163,582,919.01
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Subclass Subclass Total Subclass
Fixed Rate Notes C-1 C-2 Class C D-1
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Applicable Interest Rate 6.90000% 9.60000% 8.70000%
Day count 30 / 360 30 / 360 30 / 360
Number of Days 30 30 30
Interest Amount Payable 574,022.50 440,000.00 797,500.00
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Total Interest Paid 574,022.50 440,000.00 1,014,022.50 797,500.00
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Expected Final Payment Date 15-Mar-13 15-Oct-16 15-Mar-14
Excess Amortisation Date 15-Mar-13 15-Oct-16 15-Mar-10
Original Balance 100,000,000.00 55,000,000.00 110,000,000.00
Opening Outstanding Principal Balance 99,830,000.00 55,000,000.00 154,830,000.00 110,000,000.00
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Extended Pool Factors 100.00% 100.00% 100.00%
expected Pool Factors 99.78% 100.00% 100.00%
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Extended Amount - - -
expected Pool Factor amount 50,000.00 - -
- -------------
Surplus Amortisation - -
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Total Principal Distribution Amount 50,000.00 - 50,000.00 -
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Redemption Amount - - -
- - amount allocable to principal - - -
- - amount allocable to premium - - -
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Closing Outstanding Principal Balance 99,780,000.00 55,000,000.00 154,780,000.00 110,000,000.00
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Page 3 of 4
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5. Floating Rate Note information for next Interest Accrual Period
Start of Interest Accrual Period 15-May-00
End of Interest Accrual Period 15-May-99
Reference Date 11-May-00
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A-2 A-3 A-4 A-5 B-1 B-2
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Applicable LIBOR 6.52250% 6.52250% 6.52250% 6.52250% 6.52250% 6.52250%
Applicable Margin 0.3500% 0.5200% 0.5400% 0.5800% 0.6500% 1.0500%
Applicable Interest Rate 6.8725% 7.0425% 7.0625% 7.1025% 7.1725% 7.5725%
Actual Pool Factor 65.71% 100.00% 100.00% 96.87% 88.58% 100.00%
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Fixed Rate Notes C-1 C-2 D-1
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Actual Pool Factor 99.78% 100.00% 100.00%
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6. Payments per $ 100,000 Inital Outstanding Principal Balance of Notes
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(a) Floating Rate Notes A-2 A-3 A-4 A-5 B-1 B-2
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Opening Outstanding Principal Balance 65,746.99 100,000.00 100,000.00 97,271.73 89,141.96 100,000.00
Total Principal Payments 32.91 - - 400.24 559.04 -
Closing Outstanding Principal Balance 65,714.08 100,000.00 100,000.00 96,871.48 88,582.92 100,000.00
Total Interest 331.36 517.22 518.78 507.65 470.08 558.44
Total Premium 0.0000% 0.0000% 0.0000% 0.0000% 0.0000% 0.0000%
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(b) Fixed Rate Notes C-1 C-2 D-1
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Opening Outstanding Principal Balance 99,830.00 100,000.00 100,000.00
Total Principal Payments 50.00 - -
Closing Outstanding Principal Balance 99,780.00 100,000.00 100,000.00
Total Interest 574.02 800.00 725.00
Total Premium - - -
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A2 A3 A4 A5 B1 B2 C1 C2 D1 Total
3,400 5,800 2,000 4,000 1,000 750 1,000 550 1,100 19,600
340,000,000 580,000,000 200,000,000 400,000,000 100,000,000 75,000,000 100,000,000 55,000,000 110,000,000 1,960,000,000
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Page 4 of 4
Morgan Stanley Aircraft Finance Performance to Date
2000 Base Case
March 15, 2000 - May 15, 2000
All amounts in millions of US dollars Dollar amounts expressed as a
unless otherwise stated 2000 Base Case Lease Rentals
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Actual Basecase Variance Actual Base Case Variance
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CASH COLLECTIONS
[1] Lease Rentals 44.5 44.5 - 100.0% 100.0% 0.0%
[2] - Renegotiated Leases - - -
[3] - Rental Resets
-------------------------------- -------------------------------
[4] sum of [1]..[3] Contracted Lease Rentals 44.5 44.5 - 100.0% 100.0% 0.0%
-
[5] Movement in Current Arrears Balance (0.4) - (0.4) -0.9% 0.0% -0.9%
less Net Stress-related Costs
[6] - Bad debts - - -
[7] - Security deposits drawn down - -
[8] - Capitalised arrears - -
[9] - AOG (1.0) (1.0) -2.3%
[10] - Other Leasing Income (1.2) (1.2) -2.6%
[11] - Repossession (0.1) (0.1) -0.2% -
-------------------------------- -------------------------------
[12] sum of [6]..[11] sub-total (2.3) (2.0) (0.3) -5.1% -4.5% -0.6%
-
[13] [4]+[5]+[12] Net Lease Rentals 41.8 42.5 (0.7) 94.0% 95.5% -1.5%
-
[14] Interest Earned 0.5 0.40 0.1 1.1% 0.9% 0.2%
[15] Net Maintenance (2.1) - (2.1) -4.7% 0.0% -4.7%
-------------------------------- -------------------------------
[16] sum of [13]..[15] Total Cash Collections 40.2 42.9 (2.7) 90.4% 96.4% -6.0%
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CASH EXPENSES
Aircraft Operating Expenses
[17] - Insurance (0.2) -0.4%
[18] - Re-leasing and other overheads (0.1) -0.2%
-------------------------------- -------------------------------
[19] [17]+[18] subtotal (0.3) (0.4) 0.1 -0.6% -0.8% 0.2%
-
SG&A Expenses -
[20] Aircraft Servicer Fees -
- Base Fee (0.5) -1.1%
- Rent Collected Fee (0.5) -1.1%
- Rent Contracted Fee (0.5) -1.1%
- Incentive Fee -
-------------------------------- -------------------------------
[21] [20] sub-total (1.5) (1.5) (0.0) -3.4% -3.4% 0.0%
[22] Other Servicer Fees (0.6) (0.3) (0.3) -1.3% -0.8% -0.5%
-------------------------------- -------------------------------
[23] [21]+[22] subtotal (2.1) (1.8) (0.3) -4.7% -4.2% -0.5%
-
-------------------------------- -------------------------------
[24] [19]+[23] Total Cash Expenses (2.4) (2.2) (0.2) -5.3% -5.0% -0.3%
-
-------------------------------- -------------------------------
-
NET CASH COLLECTIONS -
[25] [16] Total Cash Collections 40.2 42.9 (2.7) 90.4% 96.4% -6.0%
[26] [24] Total Cash Expenses (2.4) (2.2) (0.2) -5.3% -5.0% -0.3%
[27] Interest Payments (21.2) (20.9) (0.3) -47.6% -46.9% -0.8%
[28] Swap Payments (1.6) (1.8) 0.2 -3.6% -4.0% 0.4%
[29] Exceptional Item - -
-------------------------------- -------------------------------
[30] sum of [25]..[29] TOTAL 15.0 18.0 (3.0) 33.8% 40.5% -6.7%
================================ ===============================
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-
[31] PRINCIPAL PAYMENTS -
subclass A2 1.3 2.4 (1.1) 2.8% 5.3% -2.5%
subclass A3 - -
subclass A4 - -
subclass A5 12.5 14.4 (1.9) 28.3% 32.5% -4.2%
subclass B1 1.1 1.1 - 2.5% 2.5% 0.0%
subclass B2 - -
subclass C1 0.1 0.1 0.2% 0.2% 0.0%
subclass C2 -
subclass D1 - -
-------------------------------- -------------------------------
Total 15.0 18.0 (3.0) 33.8% 40.5% -6.7%
================================ ===============================
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-
Debt Balances -
-------------
subclass A2 223.4
subclass A3 580.0
subclass A4 200.0
subclass A5 387.5
subclass B1 88.6
subclass B2 75.0
subclass C1 99.8
subclass C2 55.0
subclass D1 110.0
--------
1,819.3
--------
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Coverage Ratios
--------------- 2000
Closing Actual Base Case
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Net Cash Collections 15.0 18.0
Add Back Interest and Swap Payments 22.8 22.6
-----------------------------------
a Net Cash Collections 37.8 40.7
b Swaps 1.6 1.8
c Class A Interest 15.6 15.4
d Class A Minimum 4.8 4.8
e Class B Interest 2.0 1.9
f Class B Minimum 1.0 1.0
g Class C Interest 2.0 2.0
h Class C Minimum - -
I Class D Interest 1.6 1.6
j Class D Minimum - -
k Class A Scheduled 0.1 0.1
l Class B Scheduled 0.1 0.1
m Class C Scheduled 0.1 0.1
n Class D Scheduled - -
o Permitted Aircraft Modifications - -
p Class A Supplemental 8.8 11.8
-----------------------------
Total 37.8 40.6
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[1] Interest Coverage Ratio
Class A 2.20 2.37
Class B 1.57 1.71
Class C 1.40 1.51
Class D 1.32 1.43
[2] Debt Coverage Ratio
Class A 1.31 1.42
Class B 1.31 1.42
Class C 1.30 1.41
Class D 1.30 1.41
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Loan-to-Value Ratios
-------------------- 2000 Base Case Actual 2000 Base Case
15-Mar-00 15-May-00 15-May-00
----------------------------------------------
[3] Assumed Portfolio Value 2,000.9 1,987.1 1,987.1
[4] Adjusted Portfolio Value
Liquidity Reserve Amount
Cash 30.0 30.0 30.0
- Accrued Expenses 6.1 2.9 2.9
- Security Deposits 7.1 10.1 10.1
----------- --------- -----------
subtotal cash 43.2 43.1 43.1
Letters of Credit 82.1 78.9 78.9
Total Liquidity Reserve 125.3 122.0 122.0
----------- --------- -----------
[5] Total Asset Value 2,126.2 2,109.1 2,109.1
Note Balance
Class A 1,404.7 66.1% 1,390.9 65.9% 1,387.9 65.8%
Class B 164.7 73.8% 163.6 73.7% 163.6 73.6%
Class C 154.9 81.1% 154.8 81.0% 154.8 80.9%
Class D 110.0 86.3% 110.0 86.3% 110.0 86.1%
----------- --------- -----------
Total 1,834.3 1,819.3 1,816.2
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[1] Interest Coverage Ratio is equal to Net Cash Collections, before Interest
and swap payments, expressed as a ratio of the swap costs and interest payable
on each subclass of Notes plus the interest and minimum principal payments
payable on each subclass of Notes that rank senior in priority of payment to
the relevant subclass of Notes.
[2] Debt Service Ratio is equal to Net Cash Collections before interest and
swap payments, expressed as a ratio of the interest and minimum and scheduled
principal payments payable on each subclass of Notes plus the interest and
minimum and scheduled principal payments payable on each subclass of Notes that
ranks equally with or senior to the relevant subclass of Notes in the priority
of payments.
[3] Assumed Portfolio Value represents the Inital Appraised Value of each
aircraft in the Portfolio multipled by the Depreciation Factor at Calculation
date divided by the Depreciation Factor at Closing date.
[4] Adjusted Portfolio Value represents the Base Value of each aircraft in the
Portfolio as detemined by the most recent Appraisal multipled by the
Depreciation Factor at Calculation date divided by the Depreciation Factor at
Closing date.
The lower of the Assumed Portfolio Value or 105% of the Adjusted Portfolio
Value is used to calculate the principal repayment amounts to Noteholders
[5] Total Asset Value is equal to Total Portfolio Value plus Liquidity
Reserve Amount minus Lessee Security Deposits.
MSAF Performance to Date
Description of Report Line Items
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Note: Report Line Name Description
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CASH COLLECTIONS
[1] Lease Rentals Assumptions per the March 1998 Prospectus
[2] - Renegotiated Leases Change in contracted rental cash flow caused by a renegotiated lease
[3] - Rental Resets Re-leasing events where new lease rate deviated from the 1998 Base Case
[4] sum of [1]....[3] Contracted Lease Rentals Current Contracted Lease Rentals due as at the latest Calculation Date
[5] Movement in Current Arrears Balance Current contracted lease rentals not received as at the latest Calculation
Date, excluding Bad debts
less Net Stress related Costs
[6] - Bad debts Arrears owed by former lessees and deemed irrecoverable.
[7] - Capitalised arrears Current arrears that have been capitalised and restructured as a Note Payable.
[8] - Security deposits drawn down Security deposits received following a lesse default
[9] - AOG Lost of rental due to an aircraft being off-lease and non-revenue earning
[10] - Other Leasing Income Includes lease termination payments, rental guarantees and late
payments charges
[11] - Repossession Legal and technical costs incurred in repossessing aircraft.
[12] sum of [6]....[11] sub-total
[13] [4]+[5]+[12] Net Lease Rentals Contracted Lease Rentals less Movement in Current Arrears Balance and Net
Stress related costs
[14] Interest Earned Interest earned on monthly cash balances
[15] Net Maintenance Maintenance Revenue Reserve received less and reimbursements to lessees.
[16] sum of [13]...[15] Total Cash Collections Net Lease Rentals + Interest Earned + Net Maintenance
- -------------------------------------------------------------------------------------------------------------------------------
CASH EXPENSES
Aircraft Operating Expenses All operational costs to the leasing of aircraft.
[17] - Insurance Premium for contingent insurance policies
[18] - Re-leasing and other Costs associated transferring an aircraft from one lessee to another
[19] [17]+[18] subtotal
SG&A Expenses
[20] Aircraft Servicer Fees Monthly and annual fees paid to Aircraft Servicer
- Base Fee Fixed amount per month per aircraft
- Rent Contracted Fee 1.00% of rental contracted for the month
- Rent Collected Fee 1.25% of rental received for the month
- Incentive Fee Annual fee paid to Servicer for performance above an annually agreed target
[21] [20] subtotal
[22] Other Servicer Fees Administrative Agent, trustee and professional fees paid to other service
providers.
[23] [21]+[22] subtotal
[24] [19]+[23] Total Cash Expenses Aircraft Operating Expenses + SG&A Expenses
- -------------------------------------------------------------------------------------------------------------------------------
NET CASH COLLECTIONS
[25] [16] Total Cash Collections line 16 above
[26] [24] Total Cash Expenses line 24 above
[27] Interest Payments Interest paid on all outstanding debt
[28] Swap payments Net swap payments (paid) /received
[29] Proceeds from Aircraft Sales Proceeds, net of fees and expenses, from the sale of aircraft
[30] sum of [25]...[29] Exceptional Items Includes adjustment for aircraft included in the 1998 Basecase but not
acquired by MSAF
TOTAL
[31]