FLY Leasing extends loan facility

Dino D'Amore
By Dino D'Amore November 17, 2013 20:37

FLY Leasing extends loan facility

FLY Leasing has entered into an agreement to amend and extend its BOS Facility, a limited recourse debt facility. At September 30, 2013, the facility had a balance of $209 million secured by nine aircraft.

The amended facility will provide loans to FLY subsidiaries secured by seven aircraft, with six loans maturing in seven years and one in six years. The facility will be guaranteed by FLY. The two remaining aircraft are expected to be sold in the first quarter of 2014.

In connection with the transaction, the lenders will extinguish approximately $35 million of debt and FLY will contribute approximately $20 million of unrestricted cash to repay debt. The new facility will have a balance at closing of approximately $127 million. The interest rate on the amended facility will be LIBOR plus 2.5%, a reduction from the interest rate on the current facility.

“This transaction will produce up-front gains, reduce our leverage, extend our debt maturities and reduce our annual interest costs,” said Colm Barrington, CEO of FLY. “This transaction is further evidence of FLY’s attractive capital structure and of our active management of FLY’s liabilities.”

The amendment is expected to close on or about November 19, 2013, subject to customary closing conditions. As a result of the amendment, FLY anticipates recognizing a gain on debt extinguishment of more than $20 million in the fourth quarter of 2013. FLY also anticipates that it will recognize a further gain on debt extinguishment of more than $3 million when the remaining two aircraft are sold, which is expected to be in the first quarter of 2014.

Dino D'Amore
By Dino D'Amore November 17, 2013 20:37
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