SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
July 18, 2002
(Date of Earliest Event Reported)
AIRPLANES LIMITED AIRPLANES U.S. TRUST
(Exact Name of Registrants as Specified in Memorandum of Association
or Trust Agreement)
Jersey, Channel Islands Delaware
(State or Other Jurisdiction of Incorporation or Organization)
33-99970-01 13-3521640
(Commission File (IRS Employer
Number) Identification No.)
Airplanes Limited Airplanes U.S. Trust
22 Grenville Street 1100 North Market Street
St. Helier Rodney Square North
Jersey, JE4 8PX Wilmington, Delaware
Channel Islands 19890-0001
(011 44 1534 609 000) (1-302-651-1000)
(Addresses and Telephone Numbers, Including Area Codes, of
Registrants' Principal Executive Offices)
Item 5. Other Events
Attached hereto as Exhibit A is a copy of a Press Release dated July 15,
2002.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
of the registrants has duly caused this report to be signed on its behalf by
the undersigned hereto duly authorized.
AIRPLANES LIMITED
Date: July 18, 2002 /s/ Roy M. Dantzic*
-------------------
Director and Officer
Date: July 18, 2002 AIRPLANES U.S. TRUST
/s/ Roy M. Dantzic*
-------------------
Controlling Trustee
and Officer
*By: /s/ Gerard Hastings
-------------------
Attorney-in-Fact
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EXHIBIT INDEX
Exhibit A - Press Release
Exhibit B - Power of Attorney for Airplanes Limited
Exhibit C - Power of Attorney for Airplanes U.S. Trust
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Exhibit A
Notes of Aircraft Securitization Airplanes Pass-Through Trust Downgraded; Still
on Watch Neg
S&P Downgrades Aircraft Deal APTT; Still on Watch Neg
LONDON (Standard & Poor's) July 15, 2002--Standard & Poor's said today that it
lowered its ratings on Airplanes Pass-Through Trust's class B, C, and D notes,
following a recent analysis, including certain cash flow projections, which
points to the transaction deferring interest payments on these notes in the
near future.
All classes of notes in this transaction will remain on CreditWatch with
negative implications (see list below).
A decision will be taken on the rating on the class A notes pending
further in-depth analysis of:
-- The asset quality of the aircraft types and the creditworthiness of the
airlines currently involved in this portfolio; and
-- A cash flow analysis under various stress scenarios to reflect the
current market environment.
Airplanes Pass-Through Trust is the largest aircraft operating lease
securitization rated by Standard & Poor's, with 183 aircraft in the portfolio
and approximately $2.71 billion of rated notes outstanding. The transaction
closed in March 1996 and in March 1998 and March 2001 there were two
re-financings of certain classes of notes.
Prior to Sept. 11, 2001, Airplanes Pass-Through Trust had suffered from
somewhat poorer cash flow performance than was originally expected. Given
market trends in the aircraft industry since then, Standard & Poor's does not
expect performance to improve in the near term. Renegotiated leases and rental
resets have been the major cause of lease collections being lower than
originally assumed.
In the recently published 10-K report (for the fiscal year ended March 31,
2002) filed with the SEC, it was stated that with management's current revenue
expectations, Airplanes Pass-Through Trust's cash flows may be inadequate to
pay interest and minimum principal on the class B notes and interest on the
class C and D notes in the latter half of 2003. Further, to the extent that
future cash flows differ from the management's expectations, they expect that
such differences are likely to affect only the timing of when Airplanes
Pass-Through Trust ceases to pay interest and minimum principal on the class B
notes and interest on the class C and D notes.
It is Standard & Poor's opinion that this is the likely outcome. As the
ratings on these notes address
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timely interest payments (as well as ultimate principal), Standard & Poor's has
concluded that its revised ratings reflect that a deferral of interest is
imminent, which, if it happened, would qualify as a default from a rating
standpoint.
Airplanes Pass-Through Trust has a mechanism in place to divert principal
to the class A noteholders if asset values depreciate more quickly than the
assumed case. As a result of appraisal values coming in under the assumed case
for the past two years, payments of principal to the class C and D noteholders
have stopped, and look likely to be frozen out for the future. Because of the
position of the B minimum principal in the priority of payments, they have
maintained their minimum schedule thus far.
Payments have consistently been diverted to the class A noteholders over
the past two years (to the detriment of the class C and D noteholders), and so
the target minimum principal payable on the class A notes has been ahead of
schedule, having paid down more quickly than assumed in the initial rating
case. With collections forecasted to remain at current levels, however, less
money will be available to maintain this "cushion" and soon payments may be
required to sustain the class A minimum principal schedule. These payments
would rank senior in priority to payments (interest and principal) on the class
B, C, and D notes, causing the transaction to defer interest on these notes in
the near future.
Airplanes Pass-Through Trust's aircraft portfolio is broadly diversified,
but somewhat weaker than average in quality among aircraft lease portfolio
securitizations. About one-quarter of the fleet's value is represented by older
planes that have lost considerable value (e.g., F100, B737-200, DC8-71F), and
another one-fifth by McDonnell Douglas planes (e.g., MD80 series and MD11) that
are losing favor. Although many of the models are widely used and thus fairly
liquid (e.g., B737-400), relatively few incorporate the most current technology
(e.g., A320s represent only 11% of value), since most of the planes were
delivered in the late 1980s and early 1990s to lessor GPA Group Ltd.
Unfortunately, more than one-quarter of the aircraft leases come due for
renewal over the next year, heightening the risk of aircraft being off lease or
of being re-leased at reduced rental rates.
The ratings on the notes in this transaction and the CreditWatch situation
will continue to be closely monitored.
OUTSTANDING RATINGS LOWERED AND REMAINING ON CREDITWATCH
Airplanes Pass-Through Trust
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$1.112 Billion* Pass-Through Certificates Series 96-1
Class Rating
To From
B CCC/Watch Neg A/Watch Neg
C CCC/Watch Neg BB+/Watch Neg
D CCC/Watch Neg B-/Watch Neg
OUTSTANDING RATINGS REMAINING ON CREDITWATCH
Airplanes Pass-Through Trust
$2.3 Billion* Pass-Through Certificates Series 96-1
Class Rating
A AA/Watch Neg
*Initial outstanding amount of remaining classes.
ANALYTICAL E-MAIL ADDRESSES
sean_bannigan@standardandpoors.com
irene_homoore@standardandpoors.com
phil_baggaley@standardandpoors.com
michael_vernier@standardandpoors.com
StructuredFinanceEurope@standardandpoors.com
Contact:
Sean Hannigan, London (44) 20-7826-3783
Irene Ho-Moore, London (44) 20-7826-3532
Phil Baggaley, New York (1) 212-438-7683
Michael Vernier, New York (1) 212-438-6629
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Exhibit B
Attached hereto is a true and correct copy of a Power of Attorney given by
each of the persons signatory thereto.
/s/ John Banes
--------------
John Banes
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POWER OF ATTORNEY
Each of the undersigned, being a Director and officer of Airplanes
Limited, hereby individually appoints Frank Haspel, John McMahon, Huib van
Doorn, Erwin den Dikken, Brian Marks, Gerry Hastings and Sean Brennan and each
of them, acting on behalf of debis AirFinance Financial Services (Ireland)
Limited (formerly AerFi Financial Services (Ireland) Limited), as
Administrative Agent of Airplanes Limited, his true and lawful attorney-in-fact
and agent (each an "Attorney-in-Fact"), with full power by power of attorney of
substitution and resubstitution, for him and in his name, place and stead, in
his capacity as a Director and an officer of Airplanes Limited, to sign each
Report on Form 8-K which will be filed at least monthly, provided that where
any such Report on Form 8-K is required to contain any information in addition
to or other than a copy of the relevant monthly report to certificate holders,
the contents of such Report on Form 8-K shall be notified to any one Director
of Airplanes Limited prior to the filing thereof, each such Report on Form 8-K
containing a monthly report to certificate holders to be filed monthly on or
about the 15th day of each month and each other Report on Form 8-K to be filed
within the time prescribed by the Securities and Exchange Commission (the
"SEC") upon the occurrence of certain events listed in the SEC rules and
regulations with the SEC and any amendments thereto, and to file the same with
any exhibits thereto and any other documents in connection therewith with the
SEC, granting unto said Attorney-in-Fact full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said Attorney-in-Fact, or
his substitute, may lawfully do or cause to be done by virtue hereof.
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IN WITNESS WHEREOF, each of the undersigned has caused this Power of
Attorney to be duly executed and delivered in Jersey, Channel Islands on the
date indicated below.
Dated: June 6, 2002 /s/ William M. McCann
-----------------------
William M. McCann
Witness: /s/ Michael Walsh
-----------------------
Dated: June 6, 2002 /s/ Roy M. Dantzic
-----------------------
Roy M. Dantzic
Witness: /s/ Michael Walsh
-----------------------
Dated: June 6, 2002 /s/ Hugh R. Jenkins
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Hugh R. Jenkins
Witness: /s/ Michael Walsh
-----------------------
Dated: June 6, 2002 /s/ Richard E. Cavanagh
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Richard E. Cavanagh
Witness: /s/ Michael Walsh
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Dated: June 6, 2002 /s/ Brian T. Hayden
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Brian T. Hayden
Witness: /s/ Michael Walsh
-----------------------
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Exhibit C
Attached hereto is a true and correct copy of a Power of Attorney given by
each of the persons signatory thereto.
/s/ John Banes
--------------
John Banes
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POWER OF ATTORNEY
Each of the undersigned, being a Controlling Trustee and officer of
Airplanes U.S. Trust, hereby individually appoints Frank Haspel, John McMahon,
Huib van Doorn, Erwin den Dikken, Brian Marks, Gerry Hastings and Sean Brennan
and each of them, acting on behalf of debis AirFinance Financial Services
(Ireland) Limited (formerly AerFi Financial Services (Ireland) Limited), as
Administrative Agent of Airplanes U.S. Trust, his true and lawful
attorney-in-fact and agent (each an "Attorney-in-Fact"), with full power by
power of attorney of substitution and resubstitution, for him and in his name,
place and stead, in his capacity as a Controlling Trustee and an officer of
Airplanes U.S. Trust to sign each Report on Form 8-K which will be filed at
least monthly, provided that where any such Report on Form 8-K is required to
contain any information in addition to or other than a copy of the relevant
monthly report to certificate holders, the contents of such Report on Form 8-K
shall be notified to any one Controlling Trustee of Airplanes U.S. Trust prior
to the filing thereof, each such Report on Form 8-K containing a monthly report
to certificate holders to be filed monthly on or about the 15th day of each
month and each other Report on Form 8-K to be filed within the time prescribed
by the Securities and Exchange Commission (the "SEC") upon the occurrence of
certain events listed in the SEC rules and regulations with the SEC and any
amendments thereto, and to file the same with any exhibits thereto and any
other documents in connection therewith with the SEC, granting unto the said
Attorney-in-Fact full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises as fully
to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said Attorney-in-Fact, or his substitute, may lawfully
do or cause to be done by virtue hereof.
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IN WITNESS WHEREOF, each of the undersigned has caused this Power of Attorney
to be duly executed and delivered in Jersey, Channel Islands on the date
indicated below.
Dated: June 6, 2002 /s/ William M. McCann
-----------------------
William M. McCann
Witness: /s/ Michael Walsh
-----------------------
Dated: June 6, 2002 /s/ Roy M. Dantzic
-----------------------
Roy M. Dantzic
Witness: /s/ Michael Walsh
-----------------------
Dated: June 6, 2002 /s/ Hugh R. Jenkins
-----------------------
Hugh R. Jenkins
Witness: /s/ Michael Walsh
-----------------------
Dated: June 6, 2002 /s/ Richard E. Cavanagh
-----------------------
Richard E. Cavanagh
Witness: /s/ Michael Walsh
-----------------------
Dated: June 6, 2002 /s/ Brian T. Hayden
-----------------------
Brian T. Hayden
Witness: /s/ Michael Walsh
-----------------------
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