Aengus Kelly-led AerCap lines up $1bn bond sale

Aircraft leasing giant AerCap, which moved its base from Amsterdam to Dublin this year under its Irish chief executive Aengus Kelly, was poised to sell $1 billion of bonds.

AerCap, which has 1,670 owned, managed or on-order aircraft in its portfolio and almost $44 billion (€39 billion) of assets, said it planned to use the proceeds from the bond sale to buy or refinance aircraft assets and repay some of its existing high-cost debt.

The company rose from the ruins of the late Irish aviation tycoon Tony Ryan's GPA to become one of the world's largest aircraft-leasing companies, following its $7 billion takeover in 2014 of US rival ILFC.

Mr Kelly made headlines in January when he complained about Ireland’s “massively unattractive” personal tax rates, which, he said, is hindering the movement of overseas corporate executives to the State.

The group’s chief executive of five years, who started his career with GPA in 1998, owns more than $100 million worth of shares and restricted stock in AerCap, equivalent to 1.4 per cent of the group, according to its 2015 annual report.

Net profit

Last week, New York-listed the aircraft lessor reported first-quarter adjusted net profit of $301.6 million, which was virtually unchanged from the same period in 2015.

The company spent more than $300 million buying back its own shares in the market between January and May 9th. It had $29.8 billion of debt on its balance sheet at the end of March.

Standard & Poor’s said yesterday it was assigning a “BBB-” rating on the unsecured bonds AerCap is selling. This is the lowest level of what S&P considers to be investment grade. S&P has a “stable” outlook on AerCap in the expectation AerCap will increase its earnings and cash flow this year, offsetting the company’s assumption of more debt to fund new aircraft deliveries.

“We could lower our ratings on AerCap if we believe that the company will undertake a larger-than-expected level of share repurchases,” said S&P.