SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
February 9, 1999
(Date of Earliest Event Reported)
AIRPLANES LIMITED AIRPLANES U.S. TRUST
(Exact Name of Registrants as Specified in Memorandum of Association or Trust
Agreement)
Jersey, Channel Islands Delaware
(State or Other Jurisdiction of Incorporation or Organization)
33-99970-01 13-3521640
(Commission File (IRS Employer
Number) Identification No.)
Airplanes Limited Airplanes U.S. Trust
22 Grenville Street 1100 North Market Street
St. Helier Rodney Square North
Jersey, JE4 8PX Wilmington, Delaware
Channel Islands 19890-0001
(011 44 1534 609 000) (1-302-651-1000)
(Addresses and Telephone Numbers, Including Area Codes, of
Registrants' Principal Executive Offices)
Item 5. Other Events
Press release dated February 9, 1999
AIRPLANES GROUP
Aviation House, Shannon, Ireland
Telephone: +353 61 360000Fax +353 61 360503
PRESS RELEASE
Under the terms of the Airplanes Notes, Airplanes Group ("the Company") is
required annually to commission an appraisal of the Company's fleet. A
consequence of this appraisal is to redirect, when appropriate, excess cashflow
to the Class A Notes (i.e., via the Class A Principal Adjustment Amount).
Reductions in appraised values cannot directly affect interest payments to be
made on Class A, B, C and D Notes but can cause the deferral of targeted
principal payments on the Class C and D Notes and the suspension of interest
payments on the Class E Notes.
The Indentures require the Company to obtain annual appraisals of the "base
values" of each of the Company's aircraft from at least three independent
appraisers that are members of the International Society of Transport Aircraft
Trading ("ISAT"). Since 1996, the Company has obtained its annual appraisals
from Airclaims Limited ("Airclaims"), Aircraft Information Services, Inc.
("AISI") and BK Associates ("BK"). The most recent annual appraisals (as of
February 5, 1999) obtained by the Company are: AISI ($3,612 million), BK ($3,607
million) and Airclaims ($3,315 million). The average of these three appraisals
is $3,511 million (the "1999 Appraised Value"), compared with $3,729 million as
of January 23, 1998. In 1999, as in 1998 and 1997, the annual decline in the
average appraised value of the Company's aircraft has been greater than the
decline in value implied by the principal payment provisions of the Airplanes
Notes. Over the period since 1996 when these principal payment provisions were
established, the appraised values obtained from the various individual
appraisers have tended to vary in widely different amounts. In light of this
experience, the Company is giving consideration to the number and composition of
appraisers in deciding how best to comply with its appraisal obligations in the
future.
The decrease represented by the average appraised value of the portfolio as of
February 5, 1999 compared with the average appraised value as of January 23,
1998 is approximately $61 million more than the decrease implied by the terms of
the Airplanes Notes. Greater than implied decreases in value occurred across
most of the Company's fleet of aircraft, with significantly greater than implied
decreases being experienced by the Company's F100s, the Company's B737-400s and,
to a lesser extent, the Company's A320s, B737-300s, DHC8s and MD11s.
This decline in aircraft valuations will result in a Principal Adjustment
Amount of $34 million on the Class A Notes which will begin to be paid from the
February 16, 1999 Payment Date. The payment of Class A Principal Adjustment
Amount will result in a reallocation of cashflows in favour of the Class A Notes
until such time as the Class A target loan to value ratios implied by the terms
of the Airplanes Notes have been restored. Accordingly, during this period there
will be a suspension of payments of the Class E Minimum Interest Amount and a
deferral of payments of the Class C and D Scheduled Principal Amounts.
For further information concerning the Company's results of operations, please
see its Quarterly Report on Form 10-Q for the period to December 31, 1998 which
was filed today with the Securities and Exchange Commission.
Further information regarding the Appraisals
Under the terms of the Indentures governing the Airplanes Notes, the Company is
required at the beginning of each year, to obtain appraisals of the "base value"
of its aircraft from at least three independent appraisers. The appraisers
ascertained the "base value" of each aircraft on the basis of an open,
unrestricted, stable market environment as of February 5, 1999 with a reasonable
balance of supply and demand, and with full consideration of each aircraft's
"highest and best use", presuming an arm's-length, cash transaction between
willing, able and knowledgeable parties, acting prudently, with an absence of
duress and with a reasonable period of time available for marketing, adjusted to
account for the maintenance status of each aircraft (with certain assumptions as
to use since the last reported status). The Company's eight aircraft subject to
finance leases have been included at their net book value rather than appraised
value. The 1999 Appraised Value stated above does not reflect the value of
leases, maintenance reserves, security deposits or other collateral, if any,
related to a particular aircraft. An appraisal is only an estimate of value and
there can be no assurance that proceeds received upon any sale of an aircraft
would approximate the base value of that aircraft.
February 9, 1999
For further information please contact: Patrick Blaney at tel: + 353 61 360000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, each of the registrants has duly caused this report to be signed on its
behalf by the undersigned hereto duly authorized.
AIRPLANES LIMITED
Date: February 9, 1999 /s/ Roy M. Dantzic*
-------------------
Director and Officer
Date: February 9, 1999 AIRPLANES U.S. TRUST
/s/ Roy M . Dantzic*
--------------------
Controlling Trustee
and Officer
*By: /s/Michael Walsh
-----------------
Attorney-in-Fact
