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
December 13, 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 December 13, 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: December 13, 1999 By: /s/ Alexander Frank
-------------------------------
Signatory Trustee
3
<PAGE>
EXHIBIT INDEX
Exhibit A - Report to Noteholders
4
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-Dec-99
Current Calculation Date 9-Dec-99
Previous Payment Date 15-Nov-99
Previous Calculation Date 8-Nov-99
<TABLE>
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1. Account Activity Summary between Calculation Dates
- ---------------------------------------------------------------------------------------------
Prior Deposits Withdrawals Balance on
Balance Calculation Date
8-Nov-99 9-Dec-99
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expense Account 4,163,287.76 876,312.22 (3,893,281.03) 1,146,318.95
Collection Account 9,700,349.72 12,565,223.62 (9,700,349.71) 12,565,223.62
Aircraft Purchase Account - - - -
Liquidity Reserve cash balance 25,000,000.00 - - 25,000,000.00
- ---------------------------------------------------------------------------------------------
Total 38,863,637.48 13,441,535.84 (13,593,630.75) 38,711,542.57
- ---------------------------------------------------------------------------------------------
2. Analysis of Expenses Account Activity
- ---------------------------------------------------------------------------------------------
Opening Balance on Previous Calculation Date 4,163,287.76
Transfer from Collection Account on previous Payment Date 665,000.71
Permitted Aircraft Accrual
Interim Transfer from Collection Account 200,000.00
Interest Income 11,311.51
Balance on current Calculation Date
- Payments on previous payment date (582,558.48)
- Interim payments (3,310,722.55)
- other
- ---------------------------------------------------------------------------------------------
Balance on current Calculation Date 1,146,318.95
- ---------------------------------------------------------------------------------------------
3. Analysis of Collection Account Activity
- ---------------------------------------------------------------------------------------------
Opening Balance on Previous Calculation Date 9,700,349.72
Collections during period
- lease rentals 11,145,112.00
- maintenance reserves 1,200,036.89
- other leasing income 270,327.50
- interest income 149,747.23
- interim transfer to Expense A/C (200,000.00)
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 (665,000.71)
- Permitted Aircraft Modifications
Net Swap payments on previous Payment Date (477,569.44)
Aggregate Note Payments on previous Payment Date (8,557,779.56)
Interim Transfer to Expense Account
- ---------------------------------------------------------------------------------------------
Balance on current Calculation Date 12,565,223.62
- ---------------------------------------------------------------------------------------------
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 19,928,351.00 29,928,351.00
----------------
Liquidity Reserve Amount 64,928,351.00
----------------
Minimum Liquidity Reserve Amount 15,000,000.00
- ---------------------------------------------------------------------------------------------
</TABLE>
Page 1 of 4
<PAGE>
MORGAN STANLEY AIRCRAFT FINANCE
Report to Noteholders
All amounts in US dollars unless otherwise stated
Current Payment Date 15-Dec-99
Current Calculation Date 9-Dec-99
Previous Payment Date 15-Nov-99
Previous Calculation Date 8-Nov-99
<TABLE>
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Balance in Collection Account 12,565,223.62
Liquidity Reserve Amount 64,928,351.00
==================
Available Collections 77,493,574.62
==================
3. Analysis of Collection Account Activity (Continued)
- ----------------------------------------------------------------------------------------------------------------
Analysis of Current Payment Date Distributions
(i) Required Expense Amount 5,601,794.23
(ii) a) Class A Interest but excluding Step-up 2,993,802.88
b) Swap Payments other than subordinated swap payments 547,291.67
(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 458,905.54
(vi) Class B Minimum principal payment 324,886.50
(vii) Class C Interest 574,924.07
(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 49,928,351.00
(xii) Class A Scheduled principal -
(xiii) Class B Scheduled principal -
(xiv) Class C Scheduled principal 16,904.00
(xv) Class D Scheduled principal -
(xvi) Permitted accruals for Modifications
(xvii) Step-up interest -
(xviii) Beneficial interest -
(xix) Class A Supplemental principal 1,249,214.73
(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 77,493,574.62
less collection Account Top Ups (iii) (b) and (xi) (b) above 64,928,351.00
==================
12,565,223.62
==================
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2 of 4
<PAGE>
MORGAN STANLEY AIRCRAFT FINANCE
Report to Noteholders
All amounts in US dollars unless otherwise stated
Current Payment Date 15-Dec-99
Current Calculation Date 9-Dec-99
Previous Payment Date 15-Nov-99
Previous Calculation Date 8-Nov-99
<TABLE>
- -----------------------------------------------------------------------------------------------
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 5.40000% 5.40000% 5.40000%
Applicable Margin 0.2100% 0.3500% 0.6500%
Applicable Interest Rate 5.61000% 5.75000% 6.05000%
Day Count Act/360 Act/360 Act/360
Actual Number of Days 30 30 30
Interest Amount Payable 1,870,000.00 1,123,802.88 458,905.54
Step-up Interest Amount Payable - NA NA
- -----------------------------------------------------------------------------------------------
Total Interest Paid 1,870,000.00 1,123,802.88 458,905.54
- -----------------------------------------------------------------------------------------------
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 400,000,000.00 234,532,774.73 91,022,587.35
- -----------------------------------------------------------------------------------------------
Extended Pool Factors 100.00% 84.96% 97.03%
expected Pool Factors 100.00% 77.46% 93.12%
- -----------------------------------------------------------------------------------------------
Extension Amount - - 324,886.50
expected Pool Factor Amount - - -
Surplus Amortisation - 1,249,214.73 -
- -----------------------------------------------------------------------------------------------
Total Principal Distribution Amount - 1,249,214.73 324,886.50
- -----------------------------------------------------------------------------------------------
Redemption Amount
- - amount allocable to principal
- - amount allocable to premium
- -----------------------------------------------------------------------------------------------
Closing Outstanding Principal Balance 400,000,000.00 233,283,560.00 90,697,700.84
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------
(b) Fixed Rate Notes C-1 D-1
- -----------------------------------------------------------------------------
Applicable Interest Rate 6.90000% 8.70000%
Day count 30 / 360 30 / 360
Number of Days 30 30
Interest Amount Payable 574,924.07 797,500.00
- -----------------------------------------------------------------------------
Total Interest Paid 574,924.07 797,500.00
- -----------------------------------------------------------------------------
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 99,986,794.00 110,000,000.00
- -----------------------------------------------------------------------------
Extended Pool Factors 100.00% 100.00%
expected Pool Factors 99.97% 100.00%
- -----------------------------------------------------------------------------
Extended Amount - -
expected Pool Factor amount 16,794.00 -
- ---------------------------
Surplus Amortisation 110.00
- -----------------------------------------------------------------------------
Total Principal Distribution Amount 16,904.00 -
- -----------------------------------------------------------------------------
Redemption Amount - -
- - amount allocable to principal - -
- - amount allocable to premium - -
- -----------------------------------------------------------------------------
Closing Outstanding Principal Balance 99,969,890.00 110,000,000.00
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
Page 3 of 4
<PAGE>
MORGAN STANLEY AIRCRAFT FINANCE
Report to Noteholders
All amounts in US dollars unless otherwise stated
Current Payment Date 15-Dec-99
Current Calculation Date 9-Dec-99
Previous Payment Date 15-Nov-99
Previous Calculation Date 8-Nov-99
- -------------------------------------------------------------------------------
5. Floating Rate Note information for next Interest Accrual Period
Start of Interest Accrual Period 15-Dec-99
End of Interest Accrual Period 15-Jun-99
Reference Date 11-Dec-99
- -------------------------------------------------------------------------------
A-1 A-2 B-1
- -------------------------------------------------------------------------------
Applicable LIBOR 6.46250% 6.46250% 6.46250%
Applicable Margin 0.2100% 0.3500% 0.6500%
Applicable Interest Rate 6.67250% 6.8125% 7.1125%
Actual Pool Factor 100.00% 68.61% 90.70%
- -------------------------------------------------------------------------------
- ------------------------------------------------------------------
Fixed Rate Notes C-1 D-1
- ------------------------------------------------------------------
Actual Pool Factor 99.97% 100.00%
- ------------------------------------------------------------------
- -------------------------------------------------------------------------------
6. Payments per $ 100,000 Inital Outstanding Principal Balance of Notes
- -------------------------------------------------------------------------------
(a) Floating Rate Notes A-1 A-2 B-1
- -------------------------------------------------------------------------------
Opening Outstanding Principal Balance 100,000.00 68,980.23 91,022.59
Total Principal Payments - 367.42 324.89
Closing Outstanding Principal Balance 100,000.00 68,612.81 90,697.70
Total Interest 467.50 330.53 458.91
Total Premium - - -
- -------------------------------------------------------------------------------
- ------------------------------------------------------------------
(b) Fixed Rate Notes C-1 D-1
- ------------------------------------------------------------------
Opening Outstanding Principal Balance 99,986.79 100,000.00
Total Principal Payments 16.90 -
Closing Outstanding Principal Balance 99,969.89 100,000.00
Total Interest 574.92 725.00
Total Premium - -
- ------------------------------------------------------------------
- -------------------------------------------------------------------------------
Page 4 of 4
<PAGE>
Comparison of Actual Performance To Date Versus Prospectus Assumptions
December 15, 1999
<TABLE>
------------------------------------------------------------ -------------
% of Prospectus
Gross Lease Revenues
- --------------------------------------------------------------------------------------------------- -------------------------------
15-Dec-99 Actual Actual Assumed* Variance Actual Assumed* Variance
To Date To Date
- --------------------------------------------------------------------------------------------------- -------------------------------
Cash Collections
<S> <C> <C> <C> <C> <C> <C> <C>
Gross Lease Rentals 11,145,112 210,012,476 233,119,355 (23,106,880) 90.1% 100.0% -9.9%
Other Cash Received 236,263 3,187,229 3,187,229 1.4% 0.0% 1.4%
Security Deposits 0
Repossession and other Stress Related Costs (20,178) 1,916,619 (10,490,371) 12,406,990 0.8% -4.5% 5.3%
------------------------------------------------------- -------------------------------
Net Lease Rentals 11,361,197 215,116,324 222,628,984 (7,512,660) 92.3% 95.5% -3.2%
Maintenance Receipts 1,200,037 30,399,289 0 30,399,289 13.0% 0.0% 13.0%
Maintenance Expenses (3,041,667) (17,859,128) 0 (17,859,128) -7.7% 0.0% -7.7%
------------------------------------------------------- -------------------------------
Net Maintenance (1,841,630) 12,540,161 0 12,540,161 5.4% 0.0% 5.4%
Interest Received 161,059 3,989,004 2,498,516 1,490,487 1.7% 1.1% 0.6%
------------------------------------------------------- -------------------------------
Total Cash Collections 9,680,626 231,645,489 225,127,501 6,517,988 99.4% 96.6% 2.8%
Cash Expenses
Cash Operating Expenses
- Insurance, re-leasing and other costs 15,967 (1,616,002) (8,159,177) 6,543,175 -0.7% -3.5% 2.8%
-(increase) / decrease in Accrued Expenses (2,188,371) (6,234,135) (6,234,135) -2.7% 0.0% -2.7%
------------------------------------------------------- -------------------------------
subtotal (2,172,404) (7,850,137) (8,159,177) 309,040 -3.4% -3.5% 0.1%
SG&A
- Servicer Fees (350,529) (8,625,563) (10,172,551) 1,546,988 -3.7% -4.4% 0.7%
- Other Servicer provider fees and Overhead (194,262) (4,810,548) (5,828,202) 1,017,654 -2.1% -2.5% 0.4%
------------------------------------------------------- -------------------------------
subtotal (544,792) (13,436,110) (16,000,752) 2,564,642 -5.8% -6.9% 1.1%
Interest Payments (Net of Swap effects) (5,372,424) (121,453,476)(121,124,438) (329,038) -52.1% -52.0% -0.1%
------------------------------------------------------- -------------------------------
Total Cash Expenses & Interest Payments (8,089,620) (142,739,724)(145,284,368) 2,544,644 -61.2% -62.3% 1.1%
- --------------------------------------------------------------------------------------------------- -------------------------------
NET CASH COLLECTIONS 1,591,006 88,905,765 79,843,133 9,062,632 38.1% 34.2% 3.9%
- --------------------------------------------------------------------------------------------------- -------------------------------
Exceptional Items
- THY Note Distribution 27,143,085 27,143,085 0 11.6% 11.6% 0.0%
- --------------------------------------------------------------------------------------------------- -------------------------------
Cash Collections Available for Distribution 1,591,006 116,048,850 106,986,218 9,062,632 49.8% 45.9% 3.9%
- --------------------------------------------------------------------------------------------------- -------------------------------
Principal Payments
A-1 0 0 0 0.0% 0.0% 0.0%
A-2 1,249,215 106,716,440 97,653,809 9,062,631 45.8% 41.9% 3.9%
B-1 324,887 9,302,299 9,302,299 (0) 4.0% 4.0% 0.0%
C-1 16,904 30,110 30,110 0 0.0% 0.0% 0.0%
D-1 0 0 0 0 0.0% 0.0% 0.0%
------------------------------------------------------- -------------------------------
subtotal 1,591,006 116,048,849 106,986,218 9,062,631 49.8% 45.9% 3.9%
- --------------------------------------------------------------------------------------------------- -------------------------------
Total Payments to Noteholders 1,591,006 116,048,849 106,986,218 9,062,631 49.8% 45.9% 3.9%
- --------------------------------------------------------------------------------------------------- -------------------------------
Benefical Interest Distributions 0 (0) 0 (0) 0.0% 0.0% 0.0%
- --------------------------------------------------------------------------------------------------- -------------------------------
*Assumed Cash Collections and Cash Expenses have been adjusted for non-delivery of an aircraft.
</TABLE>
Page 1
<PAGE>
Comparison of Actual Performance To Date Versus Prospectus Assumptions
December 15, 1999
<TABLE>
- ---------------------------------------------------------------------------------------------------------------
Coverage Ratios
Closing Actual Assumed*
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash Collections Available for Distribution 116,048,850 106,986,218
Add Back Interest and Swap Payments 121,453,476 121,124,438
Add Back Permitted Accruals 1,600,000
a Net Cash Collections 239,102,326 228,110,656
b Swaps 12,426,371 6,583,597
c Class A Interest 69,164,124 74,225,419
d Class A Minimum 15,221,945 22,188,410
e Class B Interest 10,351,576 10,944,016
f Class B Minimum 9,302,299 9,302,299
g Class C Interest 12,371,572 12,304,906
h Class C Minimum 175 175
I Class D Interest 17,139,833 17,066,500
j Class D Minimum - -
k Class A Scheduled - -
l Class B Scheduled - -
m Class C Scheduled 29,935 29,935
n Class D Scheduled - -
o Permited Aircraft Modifications 1,600,000 -
p Class A Supplemental 91,494,495 75,465,399
--------------------------------
Total 239,102,326 228,110,656
--------------------------------
Interest Coverage Ratio
Class A 2.93 2.82
Class B 2.23 2.00
Class C 1.86 1.68
Class D 1.64 1.49
Debt Coverage Ratio
Class A 1.64 1.49
Class B 1.64 1.49
Class C 1.64 1.49
Class D 1.64 1.49
Loan-to-Value Ratios
Assumed Portfolio Value 1,115,510,000 1,012,251,125
Adjusted Portfolio Value 959,383,753
Liquidity Reserve Amount
Of which - Cash 25,000,000 31,234,135 25,000,000
- Letters of Credit held 40,000,000 40,003,351 40,003,351
---------------- --------------------------------
Subtotal 65,000,000 71,237,486 65,003,351
Less Lessee Security Deposits (20,000,000) (20,267,351) (20,267,351)
Less Accrued Expenses (6,234,135)
---------------- --------------------------------
Subtotal 45,000,000 44,736,000 44,736,000
Total Asset Value 1,160,510,000 1,004,119,753 1,056,987,125
Note Balances as at 15-Dec-99
Class A 740,000,000 63.8% 633,283,560 642,346,191 60.8% 63.1%
Class B 100,000,000 72.4% 90,697,701 90,697,701 69.4% 72.1%
Class C 100,000,000 81.0% 99,969,890 99,969,890 78.8% 82.1%
Class D 110,000,000 90.5% 110,000,000 110,000,000 89.2% 93.0%
---------------- --------------------------------
Total 1,050,000,000 933,951,151 943,013,782
---------------- --------------------------------
105.5%
- ---------------------------------------------------------------------------------------------------------------
*Prospectus Cash Collections and Cash Expenses have been adjusted for non-delivery of THY Aircraft, msn 25272.
</TABLE>
