Willis Lease Finance Corporation
05/06/2024 | Press release | Distributed by Public on 05/06/2024 07:12
New Financial Obligation - Form 8-K
Item 1.01. Entry into a Material Definitive Agreement.
On May 3, 2024, Willis Warehouse Facility LLC (the "Borrower"), a wholly owned subsidiary of Willis Lease Finance Corporation ("WLFC" or the "Company"), entered into a Secured Credit Agreement by and among the Borrower, the lenders party thereto, Bank of Utah, not in its individual capacity but solely as Security Trustee and Administrative Agent, and Bank of America, N.A., as Facility Agent, dated as of May 3, 2024 (the "Credit Agreement").
The Credit Agreement provides for a five-year, non-recourse, senior secured warehouse credit facility with an availability period of two years and an initial committed amount of up to $500 million (the "Credit Facility"). Commitments have been provided by a syndicate of banks including Bank of America, N.A. and BNP Paribas, as Co-Lead Structuring Agents and Lenders, and Crédit Agricole Corporate and Investment Bank, MUFG Bank, Ltd. and Wells Fargo Bank, N.A., as Joint Lead Arrangers and Lenders.
Proceeds from the Credit Facility will be used to finance the acquisition of certain assets, including (i) aircraft engines, (ii) airframes and (iii) loan assets that are secured by aircraft engines or airframes.
The Credit Facility is secured by substantially all of the Borrower's assets, which are expected to consist of the assets acquired with proceeds from the Credit Facility, and pledges of the Borrower's equity holdings of subsidiaries of the Borrower who may be formed from time to time to acquire or hold assets, among other assets. The Credit Facility will be recourse to the Borrower and its subsidiaries only, and will not be guaranteed by WLFC.
Loans under the Credit Facility will bear interest at Term SOFR plus an applicable interest margin. The applicable margin for loans under the Credit Facility ranges from 2.25% to 3.75% based upon the applicable date. The initial applicable margin for loans under the Credit Facility will be 2.25%.
The Credit Agreement contains certain usual and customary affirmative and negative covenants for transactions of this type, which include, among others: limitations on additional indebtedness, liens, mergers, investments, restricted payments, transactions with affiliates, the entry into certain restrictive agreements and asset sales; and requirements to provide certain financial statements, appraisals, maintenance estimates and other information. Other covenants include the maintenance of a loan to value ratio and a debt service coverage ratio, requirements to maintain certain concentration limits, weighted average remaining lease terms, and other customary requirements.
The Credit Agreement also contains usual and customary events of default, including, among others: non-payment of principal, interest, fees and other amounts; material breach of a representation or warranty; non-performance of covenants and obligations; default on other material debt; bankruptcy or insolvency; material judgments; changes in control; and certain material adverse events, in each case, subject to customary conditions and applicable cure periods.
The foregoing description of the Credit Agreement is qualified in its entirety by reference to such agreement, which will be filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the period ending June 30, 2024.