- Avolon Holdings has established a US$1.5bn commercial paper programme for its subsidiary.
- The notes will be guaranteed by Avolon and certain subsidiaries.
- Proceeds are intended for general corporate purposes, including aircraft acquisitions.
- The programme provides a flexible and cost-effective source of short-term capital.
- This development diversifies funding sources and broadens the investor base.
Avolon Holdings Limited, a global aviation finance company, has announced that its wholly-owned subsidiary, Avolon Aerospace Leasing Limited (AALL), has established a new commercial paper programme valued at US$1.5bn. The programme allows AALL to issue short-term, unsecured commercial paper notes from time to time, under an exemption from registration contained in Section 4(a)(2) of the U.S. Securities Act of 1933. The notes issued under this programme will be fully and unconditionally guaranteed by Avolon and certain of its subsidiaries.
The new programme is designed to further diversify Avolon’s funding sources and provide an additional flexible and cost-effective source of short-term capital. This capital will complement the company’s existing revolving credit facilities, with net proceeds from any issuance expected to be used for general corporate purposes. These purposes include funding aircraft acquisitions and the repayment of existing indebtedness. The notes and their related guarantees will rank at least pari passu with all other unsecured and unsubordinated indebtedness of the respective entities.
This development marks a key step in the evolution of Avolon’s funding and liquidity strategy, broadening its investor base and providing greater flexibility to optimise its funding mix. The establishment of the programme is supported by the company’s investment-grade credit ratings and its strong liquidity position. The company has clarified that the notes and guarantees have not been and will not be registered under the Securities Act, and they may not be offered or sold in the United States absent registration or an applicable exemption.
Ross O’Connor, Avolon CFO shared, “The establishment of this commercial paper programme marks another important milestone in the continued evolution of Avolon’s funding and liquidity strategy. It provides additional flexibility to optimise our funding mix, supported by our investment-grade credit ratings, strong liquidity position and robust balance sheet, whilst broadening our investor base and diversification.”
