Tuesday 23 July 2019

AerCap plans to hit debt market multiple times in 'heavy' year for capex


AerCap chief executive Aengus Kelly. Photo: Collins Courts
AerCap chief executive Aengus Kelly. Photo: Collins Courts
Gavin McLoughlin

Gavin McLoughlin

Aircraft lessor AerCap expects to tap the debt market "a number of times" this year as it expects a "pretty heavy" year for capital expenditure.

That's according to chief financial officer Peter Juhas, who was speaking to analysts after the company posted net income of $1.1bn (€0.89bn) for 2017.

"We do expect to come back to the market with a number of unsecured bond deals during the year and then we've got a bunch of secured funding to do," Juhas said.

Chief executive Aengus Kelly said he expected increased opportunity for the company as interest rates begin to rise.

"I do think there are quite a few tourists in the sector, who have arrived here due to the paucity of yields available in other asset classes," Kelly told analysts. "So as the yields on other asset classes increase, I have no doubt that we will see money leave the sector," he added.

Asked about his appetite for large-scale M&A, in a sector where there has been a lot of activity of late, Kelly said the company was "always looking at allocation of capital".

"We've looked at all the different processes, but we've been very disciplined," he said.

"We can do sale leasebacks in the market, we can buy from the manufacturers, we can buy another company, we can buy ourselves ... if we believe that buying ourselves is a greater benefit to the company long-term, then we'll do that," Kelly added.

The company - valued at more than $8bn - sold 114 aircraft in 2017 and as of the year end had a total portfolio of more than 1,500 aircraft that it owned, managed, or had on order. It emerged from the ashes of Tony Ryan's Guinness Peat Aviation to become one of the world's biggest aircraft lessors.

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