CDB provides a $86.1 million USD pre-delivery payment facility of a $358.1 million USD loan to AerCap Holdings for the acquisition of four new Airbus A330 aircraft (Linked to Record ID#102441)

Project narrative

In November 2009, China Development Bank Corporation (CDB) entered into a $358.1 million USD loan agreement with Triple Eight Aircraft Leasing Limited — an Ireland-incorporated special purpose vehicle (SPV) and wholly-owned subsidiary of AerCap Ireland Limited, itself an Ireland-incorporated wholly owned subsidiary of AerCap Holdings N.V., a Netherlands-incorporated and Amsterdam, Netherlands-headquartered global aircraft and engine leasing, trading, and parts sales, aircraft management, and aircraft maintenance and repair company listed on the New York Stock Exchange — and Peony Aircraft Leasing Limited — an Ireland-incorporated special purpose vehicle (SPV) and wholly-owned subsidiary of AerCap Ireland Limited — and AerCap Ireland Limited for the acquisition of four new Airbus A330 aircraft. This loan was divided into two facilities (tranches): a $86.1 million USD pre-delivery payment (PDP) payment facility that replaced (refinanced) existing debt for the acquisition of the aircraft and a $272.0 million USD long-term funding facility for the acquisition of the aircraft. Record ID#102440 captures the PDP facility. Record ID#102441 captures the long-term funding facility. The proceeds were to be used by the borrower to fund the delivery of four new Airbus A330 aircraft scheduled for delivery in 2010 and 2011. CDB and AerCap began negotiations in late spring 2009. This was the first direct loan from CDB to an international aircraft leasing company In December 2006, AerCap Ireland Limited signed a purchase agreement with Airbus S.A.S. to purchase up to 20 Airbus A330 aircraft; in May 2007, the purchase agreement was amended to add 10 additional aircraft. Under the purchase agreement agreement, AerCap Ireland Limited agreed to make scheduled pre-delivery payments to Airbus prior to the physical delivery of each aircraft. For the scheduled delivery of the four aircraft during 2010 and early 2011, the proceeds of the $86.1 million USD PDP facility were used to refinance and refinance up to 80% of the PDP payments made or to be made to Airbus. AerCap Ireland Limited was the borrower of the PDP facility. Under the PDP facility, each drawdown in respect of each aircraft had a final maturity date that was the earlier of (a) the date of the delivery of each respective aircraft, (b) six months from the last day of the scheduled delivery month, or (c) two years from the signing date of the PDP facility. The PDP facility carried an interest rate based on three-month LIBOR plus a margin of 3.30% payable quarterly in arrears after the initial drawing. The PDP facility was secured by (i.e. collateralized against) the partial assignment of the airframe and engine purchase agreements by AerCap Ireland Limited in respect of the four aircraft covered by the facilities, including the right to take delivery of the aircraft where the lenders have provided the pre-delivery payments and the aircraft remains undelivered. AerCap Holdings issued a guarantee for AerCap Ireland Limited's obligations under the PDP facility. Borrowings under the PDP facility could be prepaid, subject to minimum amounts of $2.0 million USD or integral multiples of $1.0 million USD and AerCap Ireland Limited giving the agent at least 15 business days' notice, without premium or penalty except for break funding costs if payment was made on a day other than an interest payment date. The PDP facility was subject to customary financial covenants. Triple Eight Aircraft Leasing Limited was one of the borrowers for the long-term funding facility via three drawdowns for three aircraft scheduled for delivery in 2010 and 2011. The facility carried a maturity period of 12 years from the initial drawing, with each drawing for each aircraft to be repaid in quarterly installments over the term of the loan. This facility carried an interest rate of three-month LIBOR plus a margin of 3.0%, with the interest payable quarterly in arrears after initial drawing for the first aircraft and interest payable in arrears for the second and third aircraft on the same dates that interest is payable for the first aircraft. This loan was secured by (i.e. collateralized against) a pledge (presumably by AerCap Ireland Limited, its parent) of the shares of Triple Eight Aircraft Leasing Limited and Triple Eight Aircraft Holdings Limited, and mortgages over each aircraft. AerCap Holdings issued a guarantee for the obligations of Triple Eight Aircraft Leasing Limited and Triple Eight Aircraft Holdings Limited under the facility. Borrowings under long-term funding facility could be prepaid, subject to minimum amounts of $2.0 million USD or integral multiples of $1.0 million USD and Triple Eight Aircraft Leasing Limited giving the agent at least 15 business days' notice, without premium or penalty, except for break funding costs if payment was made on a day other than an interest payment date. The long-term funding facility facility was subject to customary financial covenants. Peony Aircraft Leasing Limited was one of the borrowers for the long-term funding facility under one drawdown for one aircraft scheduled for delivery in 2010. The facility carried a maturity period of 12 years from the initial drawing, to be repaid in quarterly installments over the term of the loan. This facility carried an interest rate of three-month LIBOR plus a margin of 3.0%, with the interest payable quarterly in arrears after initial drawing. This loan was secured by (i.e. collateralized against) a pledge (presumably by AerCap Ireland Limited, its parent) of the shares of Peony Aircraft Leasing Limited and Peony Aircraft Holdings Limited and mortgages over the aircraft. AerCap Holdings issued a guarantee for the obligations of Peony Aircraft Leasing Limited and Peony Aircraft Holdings Limited under the facility. Borrowings under long-term funding facility could be prepaid, subject to minimum amounts of $2.0 million USD or integral multiples of $1.0 million USD and Peony Aircraft Leasing Limited giving the agent at least 15 business days' notice, without premium or penalty, except for break funding costs if payment was made on a day other than an interest payment date. The long-term funding facility facility was subject to customary financial covenants. As of December 31, 2009, the $272.0 million USD facility had not been drawn down, but the $86.1 million USD PDP facility had been drawn down, in part, to finance pre-delivery payments for the aircraft.