Netherlands-based aircraft leasing company AerCap Holdings N.V. (AER) said Wednesday that it has entered into a $2.6 billion purchase and leaseback agreement with Latin American carrier LATAM Airlines Group S.A. (LFL) for 25 wide-body aircraft. AerCap will purchase the aircraft from LATAM and immediately lease them back to LATAM.
The aircraft consist of nine new Airbus A350-900s, four new Boeing 787-9s, and two new Boeing 787-8s from LATAM's order backlog, and ten Airbus A330-200s with an average age of four years. The deliveries of the aircraft are scheduled between 2013 and 2017. AerCap noted that the appraised value of the 25 aircraft is about $3 billion.
LATAM Airlines Group is the new name given to Chilean airline LAN Airlines S.A. as a result of its takeover of Brazil's TAM S.A in June 2012. LATAM Airlines now includes LAN Airlines and its affiliates in Peru, Argentina, Colombia and Ecuador, and LAN Cargo and its affiliates, in addition to TAM S.A. and its subsidiaries.
AerCap expects to finance the aircraft with a combination of funding from the capital markets, the bank markets, and its existing warehouse facility.
Aengus Kelly, CEO of AerCap said, "This transaction provides AerCap with an attractive opportunity to expand our widebody portfolio with the most in-demand, new technology aircraft and to place them on long-term leases to one of the world's leading airlines. The agreement with LATAM Airlines Group is evidence of the increasing opportunities we are seeing for large-scale transactions as many airlines begin to take delivery of the significant orders placed at the beginning of this decade and use operating leasing as a key financing tool."
In Wednesday's regular trading session, AER is trading at $16.45, up $0.08 or 0.49 percent on a volume of 60,825 shares. LFL is trading at $18.30, down $0.06 or 0.33 percent on a volume of 34,463 shares.
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