Aircastle prices $500m private notes offer at 6.25%

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Operating lessor Aircastle yesterday priced at par $500 million in senior notes at 6.25%.

The proceeds from the private offering, which matures in 2019, will be used for general corporate purposes, including the purchase of aviation assets, the lessor says in a statement.

Separately, Aircastle announced an ex-dividend date of 28 November and a cash dividend payment of $0.165 per share scheduled for 14 December. Shareholders who purchased the lessor's stock prior to the ex-dividend date are eligible for the cash dividend payment. This represents an 10% increase over the prior quarter, says Aircastle. At the current stock price of $11.17, the dividend yield is 5.91%.

Earlier this month Aircastle reported a net loss of $45.8 million for the third quarter versus net income of $22.7 million in year-earlier period, primarily due to non-cash impairment charges of $78.7 million against 15 older aircraft.

In a third quarter earnings statement, Aircastle says the impairment charges reflect its current estimate of future lease rates and residual values associated with the 15 aircraft in the current environment. The aircraft represent approximately 1.7% of the net book value of the lessor's flight equipment.

Partially offsetting the charges are $10.2 million of maintenance revenue and $1.2 million of lease incentive benefit received from the early termination of leases associated with two impaired, older generation Airbus A320-200 aircraft. Aircastle says it expect to part-out the aircraft at their reduced carrying value.