ILFC solicits holder consents to amend two preferred series due 2065

By Susanna Moon

Chicago, July 23 - International Lease Finance Corp., a wholly owned subsidiary of American International Group, Inc., said it began consent solicitations for two junior subordinated debenture series due 2065.

ILFC is soliciting consents from holders of two series of its enhanced capital advantaged preferred securities (Ecaps), according to a company press release.

The Ecaps I represent preferred undivided beneficial ownership interests in the assets of ILFC E-Capital Trust I, a trust which holds a $600 million junior subordinated debenture due 2065 issued by ILFC, and the Ecaps II represent preferred undivided beneficial ownership interests in the assets of ILFC E-Capital Trust II, a trust which holds a $400 million junior subordinated debenture due 2065 issued by ILFC, the release noted.

ILFC said it is soliciting consents to amend certain provisions relating to financial tests.

The amendments would replace the definition of "tangible equity amount" used in calculating ILFC's ratio of equity to total managed assets with a definition for "total equity amount" that does not exclude ILFC's intangible assets from ILFC's total stockholders' equity as reflected on its consolidated balance sheet.

The company also is seeking to amend the definition of "average four quarters fixed charge ratio" by replacing the definition of "adjusted earnings before interest and taxes" with a definition for "adjusted EBITDA," which will exclude interest, taxes, depreciation, amortization, all impairment charges and loss on extinguishment of debt when calculating the earnings portion of ILFC's average four quarters fixed charge ratio.

The consent solicitations will run until the earlier of (i) 5 p.m. ET on the first date on which the required consents for the solicitation have been received, but no earlier than 5 p.m. ET on July 25 and (ii) 5 p.m. ET on July 31. Holders must be of record as of 5 p.m. ET on July 22.

If the proposed amendments are not implemented for either debenture, it is more likely that a "mandatory trigger event" and, consequently, a "mandatory deferral event" will occur under the debenture, the company said.

Therefore, it is more likely that ILFC will be required, under the note terms, to defer interest payments on a debenture if the proposed amendments are not implemented for the debenture.

Each consent solicitation is not dependent on completion of the other consent solicitation, and the proposed amendments could become effective for only one debenture and not the other debenture.

J.P. Morgan Securities LLC at (866 834-4660 or call collect 212 834-4811) is the solicitation agent. D.F. King & Co., Inc. (800 714-3312, collect 212 269-5550 or by e-mail at ilfc@dfking.com) is the information and tabulation agent.

The issuer is an aircraft lessor based in Los Angeles.

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