AerCap sets price for $500 million subordinated notes

DUBLIN - AerCap Holdings N.V. (NYSE: AER), a prominent aviation leasing company with a market capitalization of $18.54 billion, has priced a $500 million offering of junior subordinated notes with a fixed-rate reset feature, due in 2056. The offering was announced by its wholly-owned subsidiaries, AerCap Ireland Capital Designated Activity Company and AerCap Global Aviation Trust, known collectively as the Issuers. According to InvestingPro data, the company currently trades at an attractive P/E ratio of 9.3, suggesting potential value for investors.

The notes, which will initially bear interest at a rate of 6.500% per annum, are set to have their interest rates reset on January 31, 2031, and subsequently every five years in alignment with the prevailing five-year U.S. Treasury rate plus a spread of 2.441%. AerCap and certain of its subsidiaries will unconditionally guarantee the notes on an unsecured junior subordinated basis. InvestingPro analysis indicates that while the company operates with a significant debt burden of $45.37 billion, it maintains a healthy current ratio of 1.29, demonstrating adequate liquidity to meet its short-term obligations.

The proceeds from this offering are earmarked for general corporate purposes. This may include the redemption of AerCap Global Aviation Trust’s outstanding Fixed-to-Floating Rate Junior Subordinated Notes due in 2045, with the first redemption opportunity occurring on June 16, 2025. However, the press release clarified that this announcement does not serve as a notice of redemption for the 2045 notes.

Mizuho, BofA Securities, MUFG, and Truist Securities are acting as joint book-running managers for the offering. The offering is based on a registration statement on Form F-3, which became effective upon its filing with the U.S. Securities and Exchange Commission (SEC) on October 18, 2024.

AerCap, listed on the New York Stock Exchange under the ticker NYSE:AER, is recognized as a global leader in the field of aviation leasing and boasts a robust order book. The company provides a range of fleet solutions to approximately 300 clients worldwide and operates out of Dublin with offices in various international locations. With impressive gross profit margins of 57.6% and a strong return on equity of 12%, the company demonstrates solid operational efficiency. For deeper insights into AerCap’s financial health and growth potential, investors can access comprehensive analysis through InvestingPro, which offers exclusive access to over 10 additional key insights and detailed valuation metrics.

This press release contains forward-looking statements regarding the company’s future performance and events. These statements are based on assumptions and expectations and are subject to a range of risks and uncertainties. AerCap cautions that these forward-looking statements are predictions and may not be accurate or materialize as expected.

Investors are encouraged to consult the accompanying prospectus dated October 18, 2024, and other relevant documents filed with the SEC for more comprehensive information about AerCap and this offering. The information in this article is based on a press release statement.

In other recent news, AerCap Holdings has reported impressive financial results for the fourth quarter of 2024, significantly exceeding analyst forecasts. The company posted an earnings per share (EPS) of $3.31, which was notably higher than the expected $2.51, and revenue reached $2.07 billion, surpassing the anticipated $1.96 billion. Following these results, AerCap’s stock received a boost, reflecting investor optimism. In another development, Fitch Ratings upgraded AerCap’s Long-Term Issuer Default Rating to ’BBB+’ from ’BBB’, citing the company’s solid asset quality performance and strong credit metrics. Additionally, TD Cowen reaffirmed its Buy rating on AerCap with a price target of $130, highlighting the company’s strategic moves and favorable market conditions. Citi also maintained its Buy rating with a price target of $117, noting the positive outlook for aircraft lessors like AerCap due to favorable supply and demand dynamics. Furthermore, AerCap has filed its annual report with the SEC, detailing its financial performance and strategic direction for 2024. These recent developments underscore AerCap’s strong position and strategic execution in the aviation leasing industry.

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