Aircraft Lessor AerCap Draws Down Its $4 Billion Credit Facility
Aircraft Lessor AerCap to Tap Its $6.6 Billion in Credit
(Bloomberg) -- AerCap Holdings NV, the world’s largest aircraft leasing firm, is drawing down its entire $4 billion unsecured credit facility, making it the latest company to shore up its finances as the coronavirus pandemic roils markets worldwide.
“We have decided to take this action as a precautionary measure, given recent market volatility,” AerCap Chief Executive Officer Aengus Kelly said in a statement Friday.
The move comes after Bloomberg reported late Thursday that AerCap planned to draw down all or part of the $6.6 billion of credit it has access to. The company has “a strong liquidity and financial position,” with $28.2 billion of unencumbered assets and $8.2 billion of available liquidity as of Dec. 31, he said.
AerCap joins companies including Boeing Co., Hilton Worldwide Holdings Inc. and Wynn Resorts Ltd. in leaning harder on billions of dollars in credit facilities. Private equity titans Blackstone Group Inc. and Carlyle Group Inc. advised some of the businesses they control to consider similar measures to prevent potential shortfalls.
AerCap’s shares have fallen 61% in the past month, more than double the decline in the S&P 500 index. On Thursday, the stock fell 33%, the most in its history, and it was down 9.3% more at 11:57 a.m. in New York on Friday even as the S&P rose. The company is facing tumult as its airline customers cut their flight schedules amid a steep decline in travel as the coronavirus spreads.
On a call with analysts last month, Kelly said the coronavirus outbreak was “of course” affecting the company’s Chinese airline clients.
“In terms of AerCap’s exposure to Chinese customers, approximately two-thirds of our revenue comes from the big three state-owned carriers,” he said. “These airlines have been our partners for decades, and they will be our partners for decades to come. We will help them where we can through this very challenging period.”
The company has $43.7 billion in assets and is the largest owner of commercial aircraft in the world, according to its website and filings. It owned 1,035 aircraft as of Dec. 31 and had 349 on order. AerCap says it is the world’s largest lessor of Airbus SE’s A320 and Boeing Co.’s 787 planes, and the first lessor of Embraer SA’s E-Jets E2.
To contact the reporters on this story: Gillian Tan in New York at gtan129@bloomberg.net;Sridhar Natarajan in New York at snatarajan15@bloomberg.net
To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, Daniel Taub, Alan Mirabella
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