Takes Over Assets Of Australian Company And Grows Its Fleet By
More Than 80 Percent
Dublin, Ireland-based FLY Leasing Limited ("FLY"), a global
lessor of commercial jet aircraft, announced Wednesday it has
entered into an agreement to purchase a $1.4 billion portfolio of
49 aircraft, increasing FLY's total aircraft under operating lease
to more than $3 billion. The aircraft were previously managed by
Global Aviation Asset Management, an Australian company. The
aircraft are on lease to 23 airlines in 15 countries.
After completing the transaction, FLY will have 109 aircraft on
lease to 53 airlines in 29 countries. The purchase price will be
fully funded from FLY's unrestricted cash and the assumption of
existing non-recourse debt.
"This is a transformational transaction for FLY, growing our
portfolio of modern and fuel-efficient commercial aircraft by more
than 80 percent," said Colm Barrington, CEO of FLY. "This major
acquisition provides FLY with significant benefits: First, it adds
49 modern aircraft to our portfolio, growing FLY's fleet to a total
of 109 aircraft, all of which are currently on lease. Secondly, it
increases our EPS and Available Cash Flow and is immediately
accretive to both of these measures, and does not require us to
issue additional equity or source new debt. Thirdly, it adds 19 new
lessees around the world, including some of the industry's
strongest credits, further diversifying our revenues."
"This is a very compelling acquisition for FLY," said Steve
Zissis, the President and CEO of BBAM LP. "The aircraft are leased
to strong, well-run airlines around the world that will increase
FLY's annualized revenues by over 80 percent to approximately $370
million. The transaction was sourced and negotiated by BBAM and
highlights the benefit to FLY of the deep industry relationships
BBAM has around the world."
The portfolio to be acquired consists of 49 aircraft with a
weighted average age of 7.6 years at June 30, 2011 based on current
market appraisals. The average age of the combined portfolio is 8.0
years as of June 30, 2011, weighted by the net book value of FLY's
current aircraft and current market value appraisals for the
portfolio to be acquired. The combined average remaining lease term
is 4.0 years, also weighted by the above methodology. The aircraft
are on lease to 53 airlines in 29 countries. The combined
leases currently generate annualized revenues of approximately $370
million.
Lessees of the 49 aircraft include well-known airlines, with 50%
of the rents coming from European carriers and 38% from the
Asia-Pacific region. There is little overlap with FLY's current
lessees, with only four common lessees.
According to the transaction documents, FLY will acquire three
entities, currently owned by Australian investors, each indirectly
holding between one and 39 aircraft. Each of the entities or their
subsidiaries is financed with debt that will be assumed in the
transaction. The non-recourse debt is in place through five
facilities with six different lenders.
The transaction has been approved by FLY's board of directors
and is subject to lender consent, as well as other customary
closing conditions. The transaction is expected to close in the
fourth quarter.