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 11, 2000
(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 February 11, 2000 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: February 11, 2000 By: /s/ Alexander Frank
--------------------------------
Signatory Trustee
3
<PAGE>
EXHIBIT INDEX
Exhibit A - Report to Noteholders
4
Exhibit A
MORGAN STANLEY AIRCRAFT FINANCE
Report to Noteholders
All amounts in US dollars unless otherwise stated
<TABLE>
Payment Date 15th of each month
Convention Modified Following Business Day
Current Payment Date 15-Feb-00
Current Calculation Date 9-Feb-00
Previous Payment Date 18-Jan-00
Previous Calculation Date 13-Jan-00
- -----------------------------------------------------------------------------------------------
1. Account Activity Summary between Calculation Dates
- -----------------------------------------------------------------------------------------------
Prior Deposits Withdrawals Balance on
Balance Calculation Date
13-Jan-00 9-Feb-00
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expense Account 4,568,509.82 2,698,015.62 (1,469,995.57) 5,796,529.87
Collection Account 10,312,148.92 8,329,575.89 (10,312,148.46) 8,329,576.35
Aircraft Purchase Account - - - -
Liquidity Reserve cash balance 25,000,000.00 - - 25,000,000.00
- -----------------------------------------------------------------------------------------------
Total 39,880,658.74 11,027,591.51 (11,782,144.03) 39,126,106.22
- -----------------------------------------------------------------------------------------------
2. Analysis of Expenses Account Activity
- -----------------------------------------------------------------------------------------------
Opening Balance on Previous Calculation Date 4,568,509.82
Transfer from Collection Account on previous Payment Date 2,673,089.18
Permitted Aircraft Accrual
Interim Transfer to Collection Account
Interest Income 24,926.44
Balance on current Calculation Date
- Payments on previous payment date (514,076.26)
- Interim payments (955,919.31)
- other
- -----------------------------------------------------------------------------------------------
Balance on current Calculation Date 5,796,529.87
- -----------------------------------------------------------------------------------------------
3. Analysis of Collection Account Activity
- -----------------------------------------------------------------------------------------------
Opening Balance on Previous Calculation Date 10,312,148.92
Collections during period
- lease rentals 7,340,303.38
- maintenance reserves 821,281.78
- other leasing income 10,544.84
- interest income 157,445.89
- 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 (2,673,089.18)
- Permitted Aircraft Modifications
Net Swap payments on previous Payment Date 205,409.72
Aggregate Note Payments on previous Payment Date (7,844,469.00)
Interim Transfer to Expense Account
- -----------------------------------------------------------------------------------------------
Balance on current Calculation Date 8,329,576.35
- -----------------------------------------------------------------------------------------------
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 19,038,351.00 29,038,351.00
-----------------
Liquidity Reserve Amount 64,038,351.00
-----------------
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
<TABLE>
<S> <C> <C>
Current Payment Date 15-Feb-00
Current Calculation Date 9-Feb-00
Previous Payment Date 18-Jan-00
Previous Calculation Date 13-Jan-00
- ----------------------------------------------------------------------------------------------------------------
Balance in Collection Account 8,329,576.35
Liquidity Reserve Amount 64,038,351.00
==================
Available Collections 72,367,927.35
==================
3. Analysis of Collection Account Activity (Continued)
- ----------------------------------------------------------------------------------------------------------------
Analysis of Current Payment Date Distributions
(I) Required Expense Amount 721,805.73
(II) a) Class A Interest but excluding Step-up 2,969,304.80
b) Swap Payments other than subordinated swap payments 173,868.06
(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 452,045.74
(vi) Class B Minimum principal payment 327,532.85
(vii) Class C Interest 574,689.31
(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 49,038,351.00
(xii) Class A Scheduled principal -
(xiii) Class B Scheduled principal -
(xiv) Class C Scheduled principal 35,967.00
(xv) Class D Scheduled principal -
(xvi) Permitted accruals for Modifications
(xvii) Step-up interest -
(xviii) Beneficial interest -
(xix) Class A Supplemental principal 2,276,862.86
(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 72,367,927.35
less collection Account Top Ups (iii) (b) and (xi) (b) above 64,038,351.00
==================
8,329,576.35
==================
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2 of 4
<PAGE>
MORGAN STANLEY AIRCRAFT FINANCE
Report to Noteholders
All amounts in US dollars unless otherwise stated
<TABLE>
<S> <C> <C> <C>
Current Payment Date 15-Feb-00
Current Calculation Date 9-Feb-00
Previous Payment Date 18-Jan-00
Previous Calculation Date 13-Jan-00
- ----------------------------------------------------------------------------------------
4. Payments on the Notes by Subclass
- ----------------------------------------------------------------------------------------
Subclass Subclass Subclass
(a) Floating Rate Notes A-1 A-2 B-1
- ----------------------------------------------------------------------------------------
Applicable LIBOR 5.78125% 5.78125% 5.78125%
Applicable Margin 0.2100% 0.3500% 0.6500%
Applicable Interest Rate 5.99125% 6.13125% 6.43125%
Day Count Act/360 Act/360 Act/360
Actual Number of Days 28 28 28
Interest Amount Payable 1,863,944.44 1,105,360.35 452,045.74
Step-up Interest Amount Payable - NA NA
- ----------------------------------------------------------------------------------------
Total Interest Paid 1,863,944.44 1,105,360.35 452,045.74
- ----------------------------------------------------------------------------------------
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 400,000,000.00 231,792,472.68 90,371,492.90
- ----------------------------------------------------------------------------------------
Extended Pool Factors 100.00% 83.45% 96.39%
expected Pool Factors 100.00% 75.74% 92.46%
- ----------------------------------------------------------------------------------------
Extension Amount - - 327,532.85
expected Pool Factor Amount - - -
Surplus Amortisation - 2,276,862.86 -
- ----------------------------------------------------------------------------------------
Total Principal Distribution Amount - 2,276,862.86 327,532.85
- ----------------------------------------------------------------------------------------
Redemption Amount
- - amount allocable to principal
- - amount allocable to premium
- ----------------------------------------------------------------------------------------
Closing Outstanding Principal Balance 400,000,000.00 229,515,609.82 90,043,960.05
- ----------------------------------------------------------------------------------------
- ------------------------------------------------------------------------
(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 574,689.31 797,500.00
- ------------------------------------------------------------------------
Total Interest Paid 574,689.31 797,500.00
- ------------------------------------------------------------------------
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 99,945,967.00 110,000,000.00
- ------------------------------------------------------------------------
Extended Pool Factors 100.00% 100.00%
expected Pool Factors 99.91% 100.00%
- ------------------------------------------------------------------------
Extended Amount - -
expected Pool Factor amount 35,967.00 -
Surplus Amortisation -
- ------------------------------------------------------------------------
Total Principal Distribution Amount 35,967.00 -
- ------------------------------------------------------------------------
Redemption Amount - -
- - amount allocable to principal - -
- - amount allocable to premium - -
- ------------------------------------------------------------------------
Closing Outstanding Principal Balance 99,910,000.00 110,000,000.00
- ------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
Page 3 of 4
<PAGE>
MORGAN STANLEY AIRCRAFT FINANCE
Report to Noteholders
All amounts in US dollars unless otherwise stated
<TABLE>
<S> <C> <C> <C>
Current Payment Date 15-Feb-00
Current Calculation Date 9-Feb-00
Previous Payment Date 18-Jan-00
Previous Calculation Date 13-Jan-00
- -----------------------------------------------------------------------------------
5. Floating Rate Note information for next Interest Accrual Period
Start of Interest Accrual Period 15-Feb-00
End of Interest Accrual Period 15-Jun-99
Reference Date 11-Feb-00
- -----------------------------------------------------------------------------------
A-1 A-2 B-1
- -----------------------------------------------------------------------------------
Applicable LIBOR 5.88500% 5.88500% 5.88500%
Applicable Margin 0.2100% 0.3500% 0.6500%
Applicable Interest Rate 6.09500% 6.2350% 6.5350%
Actual Pool Factor 100.00% 67.50% 90.04%
- -----------------------------------------------------------------------------------
- ----------------------------------------------------------------------
Fixed Rate Notes C-1 D-1
- ----------------------------------------------------------------------
Actual Pool Factor 99.91% 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 68,174.26 90,371.49
Total Principal Payments - 669.67 327.53
Closing Outstanding Principal Balance 100,000.00 67,504.59 90,043.96
Total Interest 465.99 325.11 452.05
Total Premium - - -
- -----------------------------------------------------------------------------------
- ----------------------------------------------------------------------
(b) Fixed Rate Notes C-1 D-1
- ----------------------------------------------------------------------
Opening Outstanding Principal Balance 99,945.97 100,000.00
Total Principal Payments 35.97 -
Closing Outstanding Principal Balance 99,910.00 100,000.00
Total Interest 574.69 725.00
Total Premium - -
- ----------------------------------------------------------------------
- -----------------------------------------------------------------------------------
</TABLE>
Page 4 of 4
<PAGE>
Morgan Stanley Aircraft Finance
Performance to Date Versus 1998 Base Case
Mar 3, 1998 - Feb 15, 2000
All amounts in US dollars millions unless otherwise states
<TABLE>
- ------------------------------------------------------------------------------------------------
Coverage Ratios 1998
Closing Actual Base Case
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Cash Collections 120.5 113.2
Add Back Interest and Swap Payments 132.2 132.0
Add Back Permitted Accruals 1.6
a Net Cash Collections(excl. interest and swap pymts) 254.3 245.2
b Swaps 12.4 7.0
c Class A Interest 76.2 80.9
d Class A Minimum 15.2 22.2
e Class B Interest 11.4 11.9
f Class B Minimum 10.0 10.0
g Class C Interest 13.5 13.5
h Class C Minimum 0.0 0.0
I Class D Interest 18.7 18.7
j Class D Minimum - -
k Class A Scheduled - -
l Class B Scheduled - -
m Class C Scheduled 0.1 0.1
n Class D Scheduled - 0.0
o Permited Aircraft Modifications 1.6 -
p Class A Supplemental 95.3 81.0
------------------------------
Total 254.3 245.2
------------------------------
[1] Interest Coverage Ratio
Class A 2.87 2.79
Class B 2.21 2.01
Class C 1.83 1.69
Class D 1.62 1.49
[2] Debt Coverage Ratio
Class A 1.62 1.49
Class B 1.62 1.49
Class C 1.62 1.49
Class D 1.62 1.49
Loan-to-Value Ratios( in US dollars)
[3] Assumed Portfolio Value 1,115,510,000 1,004,954,911
[4] Adjusted Portfolio Value 952,467,605
Liquidity Reserve Amount
Of which - Cash 25,000,000 25,000,000 25,000,000
- Accrued Expenses 6,089,203
- Letters of
Credit held 40,000,000 39,038,351 39,038,351
--------------- --------------------------------------
Subtotal 65,000,000 70,127,554 64,038,351
Less Lessee Security Deposits (20,000,000) (19,038,351) (19,038,351)
Subtotal 45,000,000 51,089,203 45,000,000
[5] Total Asset Value 1,160,510,000 1,003,556,807 1,049,954,911
Note Balances as at February 15, 2000
Class A 740,000,000 63.8% 629,515,610 62.7% 636,816,388 60.7%
Class B 100,000,000 72.4% 90,043,960 71.7% 90,043,960 69.2%
Class C 100,000,000 81.0% 99,910,000 81.7% 99,914,956 78.7%
Class D 110,000,000 90.5% 110,000,000 92.6% 110,000,000 89.2%
--------------- --------------------------------------
Total 1,050,000,000 929,469,570 936,775,304
- ------------------------------------------------------------------------------------------------
*1998 Base Case Cash Collections and Cash Expenses have been adjusted for
non-delivery of an aircraft.
[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] 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.
[4] Adjusted Portfolio Value represents the Base Value of each aircraft in the
Portfolio as detemined by the most recent Appraisal multipled by the
Depreciation Factor at Calculation date divided by the Depreciation Factor at
Closing date.
The lower of the Assumed Portfolio Value or 105% of the Adjusted Portfolio Value
is used to calculate the principal repayment amounts to Noteholders
[5] Total Asset Value is equal to Total Assumed Portfolio Value plus Liquidity
Reserve Amount minus Lessee Security Deposits.
</TABLE>
<PAGE>
Performance to Date versus 1998 Base Case
Mar 3, 1998 - Feb 15, 2000
All amounts in US dollars millions unless otherwise stated
<TABLE>
- --------------------------------------------------------------------------------------------- ----------------------------------
1998 % of 1998 Base Case Lease Rentals
CASH COLLECTIONS Actual Basecase Variance Actual* Base Case Variance
- --------------------------------------------------------------------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
[1] Lease Rentals 252.9 252.9 - 100.0% 100.0% 0.0%
[2] - Renegotiated Leases (1.6) - (1.6) -0.7% 0.0% -0.7%
[3] - Rental Resets (2.5) - (2.5) -1.0% 0.0% -1.0%
---------------------------------- ----------------------------------
[4] S[1]..[3] Contracted Lease Rentals 248.8 252.9 (4.1) 98.4% 100.0% -1.6%
[5] Movement in Current Arrears Balance (3.4) - (3.4) -1.3% -1.3%
less Net Stress-related Costs
[6] - Bad debts (6.2) - -2.4%
[7] - Capitalised arrears (3.5) -1.4%
[8] - Security deposits drawn down 4.5 - 1.8%
[9] - AOG (9.9) - -3.9%
[10] - Other Leasing Income 3.8 - 1.5%
[11] - Repossession (2.2) -1.0%
---------------------------------- ----------------------------------
[12] S [6]..[11] sub-total (13.5) (11.4) (2.1) -5.4% -4.5% -0.9%
[13] [4]+[5]+[12] Net Lease Rentals 231.9 241.6 (9.6) 91.7% 95.5% -3.8%
-
[14] Interest Earned 4.3 2.7 1.6 1.7% 1.1% 0.6%
[15] Net Maintenance 5.7 - 5.7 2.3% 0.0% 2.3%
---------------------------------- ----------------------------------
[16] S [13]..[15] Total Cash Collections 242.0 244.3 (2.3) 95.7% 96.6% -0.9%
-
- --------------------------------------------------------------------------------------------- ----------------------------------
CASH EXPENSES
Aircraft Operating Expenses
[17] - Insurance (0.7) -0.3%
[18] - Re-leasing and other overheads (1.2) -0.5%
---------------------------------- ----------------------------------
[19] [17]+[18] subtotal (1.9) (8.9) 6.9 -0.8% -3.5% 2.7%
SG&A Expenses
[20] Aircraft Servicer Fees
- Base Fee (4.1)
- Rent Collected Fee (2.3)
- Rent Contracted Fee (2.4)
- Incentive Fee (0.5)
---------------------------------- ----------------------------------
[21] [20] sub-total (9.3) (11.0) 1.7 -3.7% -4.4% 0.7%
[22] Other Servicer Fees (5.2) (6.3) 1.1 -2.1% -2.5% 0.4%
---------------------------------- ----------------------------------
[23] [21]+[22] subtotal (14.5) (17.4) 2.9 -5.7% -6.9% 1.1%
---------------------------------- ----------------------------------
[24] [19]+[23] Total Cash Expenses (16.4) (26.2) 9.8 -6.5% -10.4% 3.9%
- --------------------------------------------------------------------------------------------- ----------------------------------
NET CASH COLLECTIONS
[25] [16] Total Cash Collections 242.0 244.3 (2.3) 95.7% 96.6% -0.9%
[26] [24] Total Cash Expenses (16.4) (26.2) 9.8 -6.5% -10.4% 3.9%
[27] Interest Payments (119.8) (124.9) 5.1 -47.4% -49.4% 2.0%
[28] Swap Payments (12.4) (7.0) (5.3) -4.9% -2.8% -2.1%
[29] Exceptional Item 27.1 27.1 - 10.7% 10.7% 0.0%
---------------------------------- ----------------------------------
[30] S [25]..[29] TOTAL 120.5 113.2 7.3 47.6% 44.7% 2.9%
================================== ==================================
- --------------------------------------------------------------------------------------------- ----------------------------------
[31] PRINCIPAL PAYMENTS
subclass A1 - -
subclass A2 110.5 103.2 7.3 43.7% 40.8% 2.9%
subclass B1 10.0 10.0 (0.0) 3.9% 3.9% 0.0%
subclass C1 0.0 0.0 0.0 0.0% 0.0% 0.0%
subclass D1 - -
---------------------------------- ----------------------------------
Total 120.5 113.2 7.3 47.6% 44.7% 2.9%
================================== ==================================
- ---------------------------------------------------------------------------------------------------------------------------------
Debt Balances
subclass A1 400.0 400.0
subclass A2 229.5 236.8
subclass B1 90.0 90.0
subclass C1 99.9 99.9
subclass D1 110.0 110.0
--------------------
929.5 936.8
--------------------
</TABLE>
