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Willis Lease Finance unit closes notes offering

Willis Lease Finance Corp. subsidiary Willis Engine Structured Trust III closed its offering of $335.7 million in aggregate principal amount of fixed-rate notes.

The notes were issued in two series: $293.7 million of series A notes priced at 99.91487% of par and $42 million of series B notes priced at 98.29606% of par. The notes are secured by, among other things, Willis Engine's direct and indirect interests in a portfolio of 56 engines. Proceeds from engine sales will be used to reduce Willis Engine's debt or to acquire other engines or aircraft.

The series A notes have a fixed coupon of 4.69%, an expected maturity of approximately 10 years and a final maturity date of Aug. 15, 2042. The series B notes will have a fixed coupon of 6.36%, an expected maturity of approximately 10 years and a final maturity date of Aug. 15, 2042.

In connection with the transaction, Willis Lease agreed to sell to Willis Engine a portfolio of 56 engines during a specified delivery period, by way of the sale of the beneficial ownership interests in trusts that each own one of the engines.

Willis Lease and Willis Engine also signed a servicing agreement that provides for the appointment of Willis Lease as servicer of the assets of Willis Engine and its subsidiaries. The two companies also signed an administrative agency agreement under which Willis was appointed administrative agent of Willis Engine and its subsidiaries.

Additionally, Willis Engine; Willis Lease, as administrative agent; and BNP Paribas, as initial liquidity facility provider, entered into a revolving credit agreement that provides for a revolving loan available to be applied to some of Willis Engine's obligations.