HG bonds: Air Lease adds to aircraft lessor issuance with 2024 notes; terms

Air Lease Corp. today completed a $750 million offering of 0.70% three-year notes due Feb. 15, 2024, at T+72, or 0.921%.

Of note, aircraft lessors are active on the bond markets in January, amid low funding costs and hopes for a revival in air traffic in 2021. Last week, Ireland-based Avolon Holdings (via subsidiary Avolon Holdings Funding Ltd.) placed a $1.5 billion, two-part offering across 2026 and 2028 senior unsecured issues; and California-based Aviation Capital Group LLC completed a $750 million offering of 2026 notes. And earlier this month, Ireland-based AreCap Holdings, via subsidiaries, placed a $1 billion offering of 2026 notes.

Today's offering provided the company with its lowest absolute costs thus far in the pandemic era. Air Lease last tapped the market in November 2020, when it placed a $1.5 billion, two-part offering, evenly split across a $750 million tap of the existing 2.875% notes due Jan. 15, 2026, at T+220, or at a subcoupon of 2.587%; and new 3.125% 10-year notes due Dec. 1, 2030, at T+250. The 2026 issue was originally placed in August 2020, as a $700 million offering at T+285, or 3.083%.

Including those two transactions, Air Lease tapped the market four times in 2020. In June 2020, it completed an $850 million offering of 3.375% five-year senior notes due July 1, 2025, at T+325, or 3.60%. In January 2020, the company placed a $1.4 billion, two-part offering across 2.3% five-year notes due Feb. 1, 2025, at T+90, or 2.52%; and 3% 10-year notes due Feb. 1, 2030, at T+142.

Los Angeles–based Air Lease purchases and leases commercial jet transport aircraft to airlines worldwide.

S&P Global Ratings and Fitch maintain negative outlooks on both sides on their respective BBB ratings. The outlooks date to April and March 2020, respectively, and were a result of the downward pressure on Air Lease and other aircraft lessors due to the COVID-19 pandemic.

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