AerCap to gain 'deep access' to funding with ILFC buy

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AerCap's purchase of ILFC will give the combined lessor greater financing options for purchasing aircraft and supporting future growth plans, according to its chief.

"We expect the company to have deep access to all funding markets," said Aengus Kelly, chief executive officer of AerCap on a conference call today.

AerCap and ILFC have raised more than $39 billion of financing in the last several years, he says, "many times the expected financing need of the combined company over the next few years".

Kelly anticipates "very manageable capital expenditures" of approximately $3 billion per annum during the next three years for new aircraft deliveries.

The lessor also expects to sell approximately $1 billion of aircraft per annum - the level of sales AerCap has typically executed on a stand-alone basis.

According to Kelly, more than 100 aircraft from the ILFC portfolio will be broken-up after their leases are completed, but this represents "under $1 billion in assets".

"This means less than 3% of the fleet, by value, would be parted-out," he adds.

The transaction provides "immediate value creation" for AerCap's shareholders with run-rate pro forma earnings per share of $4.00 plus, says Kelly.

Relocation of ILFC's assets is necessary to "align the assets" as AerCap already operates in Ireland. The transfer of assets will produce a reduction in the tax expense based on the Irish tax rate.