form8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
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Date
of Report (Date of earliest event reported):
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February
6, 2008
(February 5, 2008)
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Aircastle
Limited
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(Exact
name of registrant as specified in its
charter)
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Bermuda
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001-32959
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98-0444035
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(State
or other jurisdiction of incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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c/o
Aircastle Advisor LLC
300
First Stamford Place, Stamford, Connecticut
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06902
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
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(203) 504-1020
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(Former
name or former address, if changed since last
report)
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Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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[
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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[
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Section
1 -- Registrant's Business and Operations
Item
1.01 Entry Into a Material Definitive Agreement
The
description of the 2008-A Credit Agreement and other matters set forth in Item
2.03 of this Current Report on Form 8-K are incorporated herein by
reference.
Section
2 -- Financial Information
Item
2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant
General. On
February 5, 2008, a subsidiary of Aircastle Limited, or Aircastle, entered
into a
senior secured credit agreement, which we refer to as the 2008-A Credit
Agreement, with JPMorgan Chase Bank, N.A. and Calyon New York
Branch. The 2008-A Credit Agreement provides for loans
in an aggregate
amount of up to $300.0 million, with borrowings under this credit facility
being
used to finance up to the lesser of (a) 65% of the purchase price of the
aircraft secured under the facility and (b) 70% of the maintenance-adjusted
current market value of
the aircraft secured under the facility, as determined by an
appraiser. The 2008-A Credit Agreement specifies the 38 aircraft
eligible to be financed under the facility, including the majority of the
aircraft which our
affiliated companies own or are
committed to acquire in the next six months and which are not financed in our
existing securitization transactions.
Maturity
Date. Loans
under the 2008-A Credit Agreement
mature on August 4, 2008 or, if the borrower exercises its extension
option, which we
refer to as the Extension Option, then on February 3, 2009. We refer
to the period from August 4, 2008 to February 3, 2009 as the Extension
Period. In
addition, the 2008-A Credit Agreement
provides for an accelerated
maturity date which would occur on the date falling 180 days after the initial
closing of a future long-term debt financing by Aircastle or one if its
subsidiaries of $300.0 million or more (in a single transaction or series of
related transactions), which
we refer to as a Long-Term Debt
Financing.
Commitment
Period. Subject
to compliance with customary
conditions precedent and eligibility requirements, loans are generally available
under the 2008-A Credit Agreement during the period from February 5, 2008 until the initial
closing of a
Long-Term Debt Financing or, if earlier, upon maturity of all loans made under
the 2008-A Credit Agreement. Amounts repaid under the 2008-A Credit
Agreement may not be re-borrowed.
Interest
Rate and Fees. Borrowings
under the 2008-A Credit Agreement
bear interest (a) in the case of loans with an interest rate based on the
applicable base rate, or the ABR, the ABR plus an applicable margin or (b)
in
the case of loans with an interest rate based on the eurodollar rate,
or the EDR, the EDR plus an
applicable margin. The applicable margin with respect to ABR borrowings is
0.50%
per annum, increasing to 1.50% per annum during the Extension
Period. The applicable margin with respect to EDR borrowings is 1.50%
per annum, increasing
to 2.50% per annum during the
Extension Period. Additionally, we are subject to a 0.25% per annum
fee, increasing to 0.375% per annum fee during the Extension Period, on any
unused portion of the total committed facility. We are also
required to
pay customary agency
fees.
The
ABR is determined by reference to
the higher of (i) the prime rate of JPMorgan Chase Bank, N.A. and (ii) the
federal funds rate plus 0.50%. The EDR is determined by reference to one-month
LIBOR adjusted for any Federal Reserve Bank reserve
requirements. We expect that interest on loans under the 2008-A
Credit Agreement will generally be based on the EDR.
Prepayment. Advances
under the 2008-A Credit
Agreement may be prepaid without penalty upon notice, subject to
certain conditions and to
the payment of expenses, if any. Mandatory prepayments of borrowings
under the 2008-A Credit Agreement are required, among other reasons, upon the
sale, event of loss or refinancing of any aircraft financed under the 2008-A
Credit Agreement.
Guarantors. All
obligations of each borrower under
the 2008-A Credit Agreement are unconditionally guaranteed by each borrowing
affiliate (as defined therein), each subsidiary of a beneficiary and the other
borrowers under the facility, but not by Aircastle.
Collateral. Borrowings
under the 2008-A Credit
Agreement are secured by first priority perfected security interests in and
pledges or assignments of equity ownership and beneficial interests in the
borrowers and their affiliated entities, as well as by the
borrowers'
interests in aircraft leases.
Covenants. The
2008-A Credit Agreement contains
covenants broadly similar to the ones contained in our $1.0 billion senior
secured credit facility, which we refer to as Amended Credit Facility No. 2. A
violation of any of these covenants could result in a default under the 2008-A
Credit Agreement, which could result in termination of all commitments and
early
maturity of loans under the 2008-A Credit Agreement, as well as result in a
cross-default to our other credit facilities.
The
foregoing summary of certain provisions of the 2008-A Credit Agreement is
qualified in its entirety by reference to the complete 2008-A Credit Agreement
attached as Exhibit 10.1 hereto and incorporated herein by reference. A copy
of
the press release announcing the execution by Aircastle of the 2008-A Credit
Agreement is attached as Exhibit 99.1 hereto and incorporated herein by
reference.
Section
9 – Financial Statements and Exhibits
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits
10.1 Credit
Agreement (2008-A), dated as of February 5, 2008, by and among Aircastle
Investment Holdings 3 Limited and certain Borrowing Affiliates, as Borrowers,
JPMorgan Chase Bank, N.A. and Calyon New York Branch, as Lenders, JPMorgan
Chase
Bank, N.A., as Agent, and J.P. Morgan Securities Inc. and Calyon New York
Branch, as Joint Lead Arrangers
99.1 Press
Release dated February 5, 2008
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this Current Report on Form 8-K to be signed on its behalf by the
undersigned hereunto duly authorized.
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AIRCASTLE
LIMITED
(Registrant)
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/s/
David Walton
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David
Walton
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Chief
Operating Officer, General Counsel and
Secretary
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Date:
February 6, 2008
EXHIBIT
INDEX
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Exhibit
Number
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Exhibit
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10.1
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Credit
Agreement (2008-A), dated as of February 5, 2008, by and among Aircastle
Investment Holdings 3 Limited and certain Borrowing Affiliates, as
Borrowers, JPMorgan Chase Bank, N.A. and Calyon New
York
Branch, as Lenders, JPMorgan Chase Bank, N.A., as Agent, and J.P.
Morgan
Securities Inc. and Calyon New York Branch, as Joint Lead
Arrangers
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99.1
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Press
Release dated February 5, 2008
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