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
November 12, 1999
(Date of Earliest Event Reported)
MORGAN STANLEY AIRCRAFT FINANCE
(Exact Name of Registrant as Specified in Trust Agreement)
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
333-56575 13-3375162
(Commission File (IRS Employer
Number) Identification No.)
Morgan Stanley Aircraft Finance
c/o Wilmington Trust Company
1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890-1000
Attention: Corporate Trust Administration
(302) 651-1000
(Address and Telephone Number, Including Area Code, of
Registrant's Principal Executive Office)
<PAGE>
Item 5. Other Events
Attached hereto as Exhibit A is a copy of a Monthly Report to Noteholders
dated November 12, 1999 sent to each holder of Notes due March 15, 2023 of
Morgan Stanley Aircraft Finance.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
MORGAN STANLEY AIRCRAFT FINANCE
Date: November 12, 1999 By: /s/ Alexander Frank
-------------------------------------
Signatory Trustee
3
<PAGE>
EXHIBIT INDEX
Exhibit A - Report to Noteholders
4
<PAGE>
Exhibit A
MORGAN STANLEY AIRCRAFT FINANCE
Report to Noteholders
All amounts in US dollars unless otherwise stated
Payment Date 15th of each month
Convention Modified Following Business Day
Current Payment Date 15-Nov-99
Current Calculation Date 8-Nov-99
Previous Payment Date 15-Oct-99
Previous Calculation Date 8-Oct-99
<TABLE>
- -------------------------------------------------------------------------------------------------
1. Account Activity Summary between Calculation Dates
- -------------------------------------------------------------------------------------------------
Prior Deposits Withdrawals Balance on
Balance Calculation Date
8-Oct-99 8-Nov-99
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expense Account 3,585,258.25 1,328,508.66 (750,479.15) 4,163,287.76
Collection Account 10,431,543.02 9,700,349.69 (10,431,542.99) 9,700,349.72
Aircraft Purchase Account - - - -
Liquidity Reserve cash balance 25,000,000.00 - - 25,000,000.00
- -------------------------------------------------------------------------------------------------
Total 39,016,801.27 11,028,858.35 (11,182,022.14) 38,863,637.48
- -------------------------------------------------------------------------------------------------
2. Analysis of Expenses Account Activity
- -------------------------------------------------------------------------------------------------
<S> <C>
Opening Balance on Previous Calculation Date 3,585,258.25
Transfer from Collection Account on previous Payment Date 1,328,508.66
Permitted Aircraft Accrual
Interim Transfer to Collection Account
Interest Income
Balance on current Calculation Date
- Payments on previous payment date (562,131.86)
- Interim payments (188,347.29)
- other
- ------------------------------------------------------------------------------------------------
Balance on current Calculation Date 4,163,287.76
- ------------------------------------------------------------------------------------------------
3. Analysis of Collection Account Activity
- ------------------------------------------------------------------------------------------------
<S> <C>
Opening Balance on Previous Calculation Date 10,431,543.02
Collections during period
- lease rentals 8,067,025.03
- maintenance reserves 1,084,924.00
- other leasing income 385,482.63
- interest income 162,918.03
- interim transfer from Expense A/C -
Transfers from Aircraft Purchase Account -
Drawings under Credit or Liquidity Enhancement Facilities -
Repayment of Drawings under Credit or Liquidity Enhancement Facilities -
Transfer to Expense Account on previous Payment Date
- Required Expense Amount (1,328,508.66)
- Permitted Aircraft Modifications
Net Swap payments on previous Payment Date (615,208.33)
Aggregate Note Payments on previous Payment Date (8,487,826.00)
Interim Transfer to Expense Account
- -------------------------------------------------------------------------------------------------
Balance on current Calculation Date 9,700,349.72
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Analysis of Liquidity Reserve Amount
First Collection Account Reserve 15,000,000.00
Second Collection Account Reserve 10,000,000.00
Morgan Stanley Facility 10,000,000.00
ILFC Facility
- Letter of Credit 10,000,000.00
- Cash Security Deposits 20,428,351.00 30,428,351.00
--------------
Liquidity Reserve Amount 65,428,351.00
--------------
Minimum Liquidity Reserve Amount 15,000,000.00
- ------------------------------------------------------------------------------------------------
<PAGE>
Current Payment Date 15-Nov-99
Current Calculation Date 8-Nov-99
Previous Payment Date 15-Oct-99
Previous Calculation Date 8-Oct-99
- ------------------------------------------------------------------------------------------------
<S> <C>
Balance in Collection Account 9,700,349.72
Liquidity Reserve Amount 65,428,351.00
==============
Available Collections 75,128,700.72
==============
3. Analysis of Collection Account Activity (Continued)
- ------------------------------------------------------------------------------------------------
Analysis of Current Payment Date Distributions
<S> <C>
(I) Required Expense Amount 665,000.71
(II) a) Class A Interest but excluding Step-up 3,113,181.26
b) Swap Payments other than subordinated swap payments 477,569.44
(iii)a) Repayment of Primary Eligible Credit Facilities -
b) First Collection Account top-up (Minimum liquidity reserve $15 m) 15,000,000.00
(iv) Class A Minimum principal payment -
(v) Class B Interest 476,379.72
(vi) Class B Minimum principal payment 323,568.54
(vii) Class C Interest 574,981.44
(viii) Class C Minimum principal payment -
(ix) Class D Interest 797,500.00
(x) Class D Minimum principal payment -
(xi) a) Secondary Eligible Credit Facilities
(ILFC and Morgan Stanley Facilities) -
b) Second collection account top-up 50,428,351.00
(xii) Class A Scheduled principal -
(xiii) Class B Scheduled principal -
(xiv) Class C Scheduled principal 9,978.00
(xv) Class D Scheduled principal -
(xvi) Permitted accruals for Modifications
(xvii) Step-up interest -
(xviii) Beneficial interest -
(xix) Class A Supplemental principal 3,262,190.61
(xx) Class B Supplemental principal -
(xxi) Class D Redemption Price -
(xxii) Class C Redemption Price -
(xxiii) Class B Redemption Price -
(xxiv) Class A Redemption Price -
(xxv) Subordinated Swap payments -
(xxvi) all remaining amounts to holders of Beneficial interests
Total Payments with respect to Payment Date 75,128,700.72
less collection Account Top Ups (iii) (b) and (xi) (b) above 65,428,351.00
--------------
9,700,349.72
==============
- ------------------------------------------------------------------------------------------------
<PAGE>
Current Payment Date 15-Nov-99
Current Calculation Date 8-Nov-99
Previous Payment Date 15-Oct-99
Previous Calculation Date 8-Oct-99
- ------------------------------------------------------------------------------------------------
4. Payments on the Notes by Subclass
- ------------------------------------------------------------------------------------------------
Subclass Subclass Subclass
(a) Floating Rate Notes A-1 A-2 B-1
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Applicable LIBOR 5.40625% 5.40625% 5.40625%
Applicable Margin 0.2100% 0.3500% 0.6500%
Applicable Interest Rate 5.61625% 5.75625% 6.05625%
Day Count Act/360 Act/360 Act/360
Actual Number of Days 31 31 31
Interest Amount Payable 1,934,486.11 1,178,695.15 476,379.72
Step-up Interest Amount Payable - NA NA
- ----------------------------------------------------------------------------------------
Total Interest Paid 1,934,486.11 1,178,695.15 476,379.72
- ----------------------------------------------------------------------------------------
Expected Final Payment Date 15-Mar-00 15-Sep-05 15-Mar-13
Excess Amortisation Date 15-Mar-00 15-Apr-98 15-Apr-98
- ----------------------------------------------------------------------------------------
Original Balance 400,000,000.00 340,000,000.00 100,000,000.00
Opening Outstanding Principal Balance 400,000,000.00 237,794,965.34 91,346,155.89
- ----------------------------------------------------------------------------------------
Extended Pool Factors 100.00% 85.72% 97.34%
expected Pool Factors 100.00% 78.90% 93.46%
- ----------------------------------------------------------------------------------------
Extension Amount - - 323,568.54
expected Pool Factor Amount - - -
Surplus Amortisation - 3,262,190.61 -
- ----------------------------------------------------------------------------------------
Total Principal Distribution Amount - 3,262,190.61 323,568.54
- ----------------------------------------------------------------------------------------
Redemption Amount
- - amount allocable to principal
- - amount allocable to premium
- ----------------------------------------------------------------------------------------
Closing Outstanding Principal Balance 400,000,000.00 234,532,774.73 91,022,587.35
- ----------------------------------------------------------------------------------------
- ------------------------------------------------------------------------
(b) Fixed Rate Notes C-1 D-1
- ------------------------------------------------------------------------
<S> <C> <C>
Applicable Interest Rate 6.90000% 8.70000%
Day count 30 / 360 30 / 360
Number of Days 30 30
Interest Amount Payable 574,981.44 797,500.00
- ------------------------------------------------------------------------
Total Interest Paid 574,981.44 797,500.00
- ------------------------------------------------------------------------
Expected Final Payment Date 15-Mar-13 15-Mar-14
Excess Amortisation Date 15-Mar-13 15-Mar-10
Original Balance 100,000,000.00 110,000,000.00
Opening Outstanding Principal Balance 99,996,772.00 110,000,000.00
- ------------------------------------------------------------------------
Extended Pool Factors 100.00% 100.00%
expected Pool Factors 99.99% 100.00%
- ------------------------------------------------------------------------
Extended Amount - -
expected Pool Factor amount 6,772.00 -
- ---------------------------
Surplus Amortisation 3,206.00
- ------------------------------------------------------------------------
Total Principal Distribution Amount 9,978.00 -
- ------------------------------------------------------------------------
Redemption Amount - -
- - amount allocable to principal - -
- - amount allocable to premium - -
- ------------------------------------------------------------------------
Closing Outstanding Principal Balance 99,986,794.00 110,000,000.00
- ------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
<PAGE>
Current Payment Date 15-Nov-99
Current Calculation Date 8-Nov-99
Previous Payment Date 15-Oct-99
Previous Calculation Date 8-Oct-99
- --------------------------------------------------------------------------------
5. Floating Rate Note information for next Interest Accrual Period
Start of Interest Accrual Period 15-Nov-99
End of Interest Accrual Period 15-Jun-99
Reference Date 11-Nov-99
- --------------------------------------------------------------------------------
A-1 A-2 B-1
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Applicable LIBOR 5.40000% 5.40000% 5.40000%
Applicable Margin 0.2100% 0.3500% 0.6500%
Applicable Interest Rate 5.61000% 5.7500% 6.0500%
Actual Pool Factor 100.00% 68.98% 91.02%
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------
Fixed Rate Notes C-1 D-1
- -------------------------------------------------------------------
<S> <C> <C>
Actual Pool Factor 99.99% 100.00%
- -------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. Payments per $ 100,000 Inital Outstanding Principal Balance of Notes
- --------------------------------------------------------------------------------
(a) Floating Rate Notes A-1 A-2 B-1
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Opening Outstanding Principal Balance 100,000.00 69,939.70 91,346.16
Total Principal Payments - 959.47 323.57
Closing Outstanding Principal Balance 100,000.00 68,980.23 91,022.59
Total Interest 483.62 346.68 476.38
Total Premium - - -
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------
(b) Fixed Rate Notes C-1 D-1
- -------------------------------------------------------------------
<S> <C> <C>
Opening Outstanding Principal Balance 99,996.77 100,000.00
Total Principal Payments 9.98 -
Closing Outstanding Principal Balance 99,986.79 100,000.00
Total Interest 574.98 725.00
Total Premium - -
- -------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
Comparison of Actual to Date Cashflows versus Prospectus
% of Assumed Gross Lease Revenues
- --------------------------------------------------------------------------------- --------------------------------------
Actual To Assumed* Variance Actual Assumed* Variance
15-Nov-99 To Date
- --------------------------------------------------------------------------------- --------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Cash Collections
Gross Lease Rentals 198,867,363 220,930,582 (22,063,219) 90.0% 100.0% -10.0%
Other Cash Received 2,950,951 2,950,951 1.3% 0.0% 1.3%
Security Deposits 4,006,650 4,006,650 1.8% 1.8%
Repossession Costs - Actual (2,071,438) (9,941,876) 7,870,438 -0.9% -4.5% 3.6%
Repossession Costs - Accrued (128,000) (128,000) -0.1% 0.0% -0.1%
------------------------------------------ --------------------------------------
Net Lease Rentals 203,625,527 210,988,706 (7,363,179) 92.2% 95.5% -3.3%
Maintenance Receipts 29,199,252 0 29,199,252 13.2% 0.0% 13.2%
Maintenance Expenses- Actual (14,817,461) 0 (14,817,461) -6.7% 0.0% -6.7%
Maintenance Expenses - Accrued (3,804,276) (3,804,276) -1.7% 0.0% -1.7%
------------------------------------------ --------------------------------------
Net Maintenance 10,577,515 0 10,577,515 4.8% 0.0% 4.8%
Interest Received 3,827,945 2,381,771 1,446,175 1.7% 1.1% 0.7%
------------------------------------------ --------------------------------------
Total Cash Collections 218,030,987 213,370,476 4,660,510 98.7% 96.6% 2.1%
Cash Expenses
Cash Operating Expenses
- Insurance, re-leasing and other
costs - Actual (1,630,383) (7,732,570) 6,102,187 -0.7% -3.5% 2.8%
- Insurance, re-leasing and other
costs - Accrued 0 0 0.0% 0.0% 0.0%
------------------------------------------ --------------------------------------
subtotal (1,630,383) (7,732,570) 6,102,187 -0.7% -3.5% 2.8%
SG&A
- Servicer Fees (8,275,033) (9,673,455) 1,398,422 -3.7% -4.4% 0.6%
- Other Servicer provider fees
and Overhead - Actual (4,616,285) (5,537,159) 920,873 -2.1% -2.5% 0.4%
- Other Servicer provider fees
and Overhead - Accrued (113,472) (113,472) -0.1% 0.0% -0.1%
------------------------------------------ --------------------------------------
subtotal (13,004,791) (15,210,614) 2,205,823 -5.9% -6.9% 1.0%
Interest Payments (Net of Swap Payments) (116,081,052)(115,680,672) (400,380) -52.5% -52.4% -0.2%
------------------------------------------ --------------------------------------
Total Cash Expenses & Interest Payments (130,716,226)(138,623,856) 7,907,630 -59.2% -62.7% 3.6%
- --------------------------------------------------------------------------------- --------------------------------------
Net Cash Collections 87,314,760 74,746,620 12,568,140 39.5% 33.8% 5.7%
- --------------------------------------------------------------------------------- --------------------------------------
Exceptional Items
- THY Note Distribution 27,143,085 27,143,085 0 12.3% 12.3% 0.0%
- --------------------------------------------------------------------------------- --------------------------------------
Cash Collections Available for
Distribution 114,457,845 101,889,705 12,568,140 51.8% 46.1% 5.7%
- --------------------------------------------------------------------------------- --------------------------------------
Principal Payments
A-1 0 0 0 0.0% 0.0% 0.0%
A-2 105,467,225 92,899,086 12,568,139 47.7% 42.0% 5.7%
B-1 8,977,413 8,977,413 (0) 4.1% 4.1% 0.0%
C-1 13,206 13,206 0 0.0% 0.0% 0.0%
D-1 0 0 0 0.0% 0.0% 0.0%
------------------------------------------ --------------------------------------
subtotal 114,457,844 101,889,705 12,568,139 51.8% 46.1% 5.7%
- --------------------------------------------------------------------------------- --------------------------------------
Total Payments to Noteholders 114,457,844 101,889,705 12,568,139 51.8% 46.1% 5.7%
- --------------------------------------------------------------------------------- --------------------------------------
Benefical Interest Distributions 0 0 0 0.0% 0.0% 0.0%
Total Accrued Expenses on Payment Date: (4,045,748)
- --------------------------------------------------------------------------------- --------------------------------------
*Assumed Cash Collections and Cash Expenses have been adjusted for non-delivery of an aircraft.
</TABLE>
<PAGE>
<TABLE>
Coverage Ratios
Closing Actual Assumed*
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash Collections Available for
Distribution 114,457,845 101,889,705
Add Back Interest and Swap Payments 116,081,052 115,680,672
--------
Add Back Permitted Accruals 1,600,000
---------
<S> <C> <C> <C>
a Net Cash Collections(excl. interest
and swap pymts) 232,138,897 217,570,377
b Swaps 11,879,080 6,240,472 5,999,708
c Class A Interest 66,170,321 70,982,656 67,619,558
d Class A Minimum 15,221,945 22,188,410 22,188,410
e Class B Interest 9,892,670 10,458,563 9,955,144
f Class B Minimum 8,977,413 8,977,413 8,653,844
g Class C Interest 11,796,648 11,729,981 11,155,000
h Class C Minimum 175 175 175
i Class D Interest 16,342,333 16,269,000 15,471,500
j Class D Minimum - - -
k Class A Scheduled - - -
l Class B Scheduled - - -
m Class C Scheduled 13,031 13,031 3,228
n Class D Scheduled - - -
o Permitted Aircraft Modifications 1,600,000 - -
p Class A Supplemental 90,245,280 70,710,676 68,379,981
------------------------------------
Total 232,138,896 217,570,377 209,426,548
------------------------------------
Interest Coverage Ratio
Class A 2.97 2.82
Class B 2.25 1.98
Class C 1.87 1.67
Class D 1.65 1.48
Debt Coverage Ratio
Class A 1.65 1.48
Class B 1.65 1.48
Class C 1.65 1.48
Class D 1.65 1.48
<S> <C> <C> <C>
Loan-to-Value Ratios
Assumed Portfolio Value 1,115,510,000 1,015,877,091
Adjusted Portfolio Value 962,820,839
Liquidity Reserve Amount
Of which - Cash 25,000,000 25,000,000 25,000,000
- Accrued Expenses 4,045,748
- Letters of Credit held 40,000,000 40,003,351 40,003,351
------------- -----------------------------------
Subtotal 65,000,000 69,049,099 65,003,351
Less Lessee Security
Deposits (20,000,000) (20,003,351) (20,003,351)
Subtotal 45,000,000 49,045,748 45,000,000
Total Asset Value 1,160,510,000 1,011,866,587 1,060,877,091
Note Balances as at 15-Nov-99
<S> <C> <C> <C> <C> <C> <C>
Class A 740,000,000 63.8% 634,532,775 647,100,914 61.0% 62.7%
Class B 100,000,000 72.4% 91,022,587 91,022,587 69.6% 71.7%
Class C 100,000,000 81.0% 99,986,794 99,986,794 79.0% 81.6%
Class D 110,000,000 90.5% 110,000,000 110,000,000 89.4% 92.5%
------------- -----------------------------------
1,050,000,000 935,542,156 948,110,295
------------- -----------------------------------
- -------------------------------------------------------------------------------------------------------------------------
*Assumed Cash Collections and Cash Expenses have been adjusted for non-delivery of an aircraft.
</TABLE>
<PAGE>
1. Interest Coverage Ratio is equal to Net Cash Collections(excl. interest and
swap payments) expressed as a ratio of the interest payable on each subclass of
Notes plus the interest and minimum principal payments payable on each subclass
of Notes that rank senior in priority of payment to the relevant subclass of
Notes.
2. Debt Service Ratio is equal to Net Cash Collections (excl. interest and swap
payments) expressed as a ratio of the interest and minimum and scheduled
principal payments payable on each subclass of Notes plus the interest and
minimum and scheduled principal payments payable on each subclass of Notes that
ranks equally with or senior to the relevant subclass of Notes in the priority
of payments.
3. Total Asset Value is equal to Total Assumed Portfolio Value plus Liquidity
Reserve Amount minus Lessee Security Deposits.
4. Assumed Portfolio Value represents the Inital Appraised Value of each
aircraft in the Portfolio multipled by the Depreciation Factor at Calculation
date divided by the Depreciation Factor at Closing date.
5. Adjusted Portfolio Value represents the Base Value of each aircraft in the
Portfolio as detemined by the most recent Appraisal multiplied by the
Depreciation Factor at Calculation date divided by the Depreciation Factor at
Closing date.
6. The lower of the Assumed Portfolio Value or 105% of the Adjusted Portfolio
Value is used to calculate the principal repayment amounts to Noteholders
