Yesterday Air Lease Corporation (ALC) priced its latest jumbo medium-term note (MTN) issuance with a record low rate for the seven-year tranche and its second lowest rate for the three-year paper.
ALC treasurer, Daniel Verwholt, shared his thoughts on the transaction. “We were very pleased with the result. The combined pricing represented a blended funding cost of ~1.39% which is well inside our composite cost of funds.”
The $1.1bn public offering comprises $600 million 0.80% senior unsecured medium-term notes due August 18, 2024 and $500 million 2.10% senior unsecured medium-term notes due September 1, 2028.
“The three-year transaction at 0.80% is ALC’s second lowest coupon on record (following our 0.70% result earlier this year in January), while the seven-year was a record low for that tenor at 2.10%,” added Verwholt. “These rates are well inside our leasing peers and we believe reflect ALC’s strong balance sheet and solidly investment grade credit profile. ALC has been focused on conservative management of our capital structure and the dual-tranche 3/7yr transaction allowed us to take advantage of favourable front-end rates while also extending duration with a 7yr to capture the broadest demand from investors.”
The sale of the notes is expected to close on August 18.
Citi, JPMorgan, TD Securities, and Wells Fargo are acting as joint bookrunners for the offering.