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Fly Leasing extends BOS facility

Dublin-based commercial aircraft lessor Fly Leasing Ltd (NYSE: FLY) said that it has entered into an agreement to amend and extend its BOS Facility a limited recourse debt facility.

At September 30, 2013, the facility had a balance of USD 209m secured by nine aircraft, Fly said.

The amended facility will provide loans to Fly subsidiaries secured by seven aircraft, with six loans maturing in seven years and one in six years. The facility will be guaranteed by Fly. The two remaining aircraft are expected to be sold in the first quarter of 2014.

In connection with the transaction, the lenders will extinguish approximately USD 35m of debt and Fly will contribute approximately USD 20m of unrestricted cash to repay debt.

The new facility will have a balance at closing of approximately USD 127m. The interest rate on the amended facility will be LIBOR plus 2.5%, a reduction from the interest rate on the current facility.

Fly said that the amendment is expected to close on or about November 19, 2013, subject to customary closing conditions. As a result of the amendment, Fly anticipates recognizing a gain on debt extinguishment of more than USD 20m in the fourth quarter of 2013.

The firm said it also anticipates that it will recognize a further gain on debt extinguishment of more than USD 3m when the remaining two aircraft are sold, which is expected to be in the first quarter of 2014.

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