Editorial Comment

It is all about ILFC and Doric Lease Corp so far

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It is all about ILFC and Doric Lease Corp so far

 

To say that it is wet at the Paris air show would be an understatement in the extreme – the reality is that it is raining so hard that the twenty million dollar-plus Airbus chalet is leaking through the light sockets. Beware all who enter as the lights are still on, maybe it is a cunning plan to get shot of some pesky reporters before the show is out.

 

The highlight of the show so far is the Doric Lease Corp MoU for the purchase of 20 A380s. The move makes the A380 more accessible to both new and existing A380 operators. Doric is of course already the third largest wide-body lessor worldwide by value, and the world’s largest asset manager of leased A380s with about a $6bn aircraft portfolio under management, including 18 A380s acquired through sale-leaseback arrangements.

 

Well we have known about it for three months and we gave you all a running chance to get to the facts by dropping so many markers and hints in Airline Economics issues that in the event we ran a close line on giving this one away. As the cover story of Airline Economics attests – this show is all about four engine aircraft and the need to fill then order books. This is very good timing for Doric and it should have been able to pinch a good price from Airbus. Attention now turns to the 747-8I. If Boeing does not announce an order for the 747-8I soon then Doric Leasing will be on a real winner not only filling a market need for leasing the A380 but also seeing some good gains on the value of its portfolio.

 

Meanwhile GECAS gave kick start to the 787-10X, which in the end is to their benefit, given that it has GE engines on wing. This order can be described as somewhat speculative at this time given that there are so many caveats in the LOI with Boeing. 

 

ILFC was also closing out a deal for the A320Neo with an exercised option for 50 of the type. ILFC also signed an MOU for 25 E190 E2s and 25 E195 E2s.

 

But the big news of the day thus far is that AIG Capital Corp a wholly-owned direct subsidiary of AIG and the sole shareholder of International Lease Finance Corporation entered into an amendment to the Share Purchase Agreement relating to the sale of up to 90.0% of ILFC’s common stock to Jumbo. The amendment extends by one and a half months, to July 31, 2013, the date on which AIG may terminate the Share Purchase Agreement if the closing of the deal has not yet occurred. Under the Amendment, AIG may pursue other offers for ILFC and may continue to pursue the alternative of a public offering. Under the amendment, AIG may also terminate the Share Purchase Agreement prior to July 31, 2013 if AIG reasonably determines in good faith that closing conditions relating to regulatory matters would not be satisfied by July 31, 2013. The Amendment also amends to July 15, 2013 the date by which the Purchaser may deliver the Option Notice to AIG.

 

Given the current market conditions and the strength of ILFC finances, which continue to rapidly improve, an IPO would be a great option for AIG.

 

So in short I am as things stand, going to be calling in a few bets – You know who you are.