ALC places all off lease aircraft in 2012; makes inroads in 2013

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Air Lease (ALC) has placed two Airbus A320 aircraft that have come off lease this year and says it is making progress on its 2013 renewals.

Speaking on a third quarter earnings call, Gregory Willis, senior vice president and chief financial officer of ALC said one repossessed A320 from Kingfisher "will be leased to an airline in Eastern Europe." Also, an A320 coming off scheduled lease from Aer Lingus "will be leased" to a carrier in Asia, he says.

ALC has three aircraft that will come off lease next year, including an Airbus A319, an A320 and a Boeing 737-700. The lessor says it already has extended the A320 lease with its Chinese lessee for three more years. It is "discussing the extension" of the 737-700 lease with the lessee. That lease ends in November 2013.

"Basically it's minimal lease expiries in 2013," says Willis.

Separately, ALC said it sees no signs of distress in the availability of aviation funding after the lessor tapped the public markets for the second time this year.

During the last week of the third quarter, ALC closed its second debt capital market transaction in 2012, raising an additional $500 million in unsecured debt.

"The markets have been very receptive to our strong credit metrics. This has allowed us to construct a debt portfolio with a low composite cost of funds of 3.97%, our weighted average life of 5.1 years, all being nearly 60% unsecured," says Willis.

Steven Udvar-Házy, chairman and chief executive officer of ALC, noted the capital markets "have opened" to the aviation market, including export credit agency financings paired with bond offerings.

"Even the commercial bank market has held up better than expected, even though some banks were predicted to significantly scale back their lending," he says. "This has not occurred and overall financing is in relatively good supply for the industry, especially for quality airlines and quality lessors."