UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM 10-Q
-------------------------
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ________
-------------------------
Commission File No. 333-82153
-------------------------
AIRCRAFT FINANCE TRUST
----------------------
(Exact name of registrant as specified in its charter)
51-6512392
(IRS Employer Identification No.)
DELAWARE
(State or other jurisdiction of incorporation or organization)
1100 North Market Street, Rodney Square North, Wilmington, Delaware 19890
(302) 651-1000
(Address and telephone number of principal executive offices)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
This document consists of 15 pages.
<PAGE>
Aircraft Finance Trust
FORM 10-Q - For the Quarterly Period Ended March 31, 2000
INDEX
Part I. Financial Information
Page
Item 1. Financial Statements
a) Consolidated Balance Sheets - March 31, 2000 and
December 31, 1999...........................................3
b) Consolidated Statement of Income - Three Months Ended
March 31, 2000..............................................4
c) Consolidated Statement of Cash Flows - Three Months
Ended March 31, 2000........................................5
d) Consolidated Statement of Changes in
Beneficial Interest Holders' Equity - Year Ended
December 31, 1999 and Three Months Ended March 31, 2000.....6
e) Notes to Consolidated Financial Statements..................7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations...........8
Item 3. Quantitative and Qualitative Disclosures about Market
Risk...................................................11
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K.......................13
Signatures .......................................................14
2
<PAGE>
Part I. Financial Information
-----------------------------
Item 1. Financial Statements
Aircraft Finance Trust and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands)
March 31, December 31,
2000 1999
--------- ------------
(unaudited)
Assets
Cash and cash equivalents $ 74,604 $ 72,682
Restricted cash 18,275 19,468
Rents and other receivables 3,582 4,122
Aircraft, net 1,160,319 1,170,564
Other assets 35 138
---------- ----------
Total assets $1,256,815 $1,266,974
========== ==========
Liabilities and Beneficial Interest Holders' Equity
Accounts payable and accrued liabilities $ 4,085 $ 5,819
Deferred rental income 5,436 7,031
Security and other deposits 31,182 30,385
Notes payable:
Class A-1 512,500 512,500
Class A-2 360,393 368,897
Class B 124,794 124,798
Class C 106,000 106,000
Class D 64,000 64,000
---------- ----------
Total notes payable 1,167,687 1,176,195
---------- ----------
Total liabilities 1,208,390 1,219,430
---------- ----------
Beneficial interest holders' equity 48,425 47,544
---------- ----------
Total liabilities and beneficial interest
holders' equity $1,256,815 $1,266,974
========== ==========
The accompanying notes are an integral part
of these consolidated financial statements.
3
<PAGE>
Aircraft Finance Trust and Subsidiaries
Consolidated Statement of Income
(dollars in thousands)
Three Months
Ended
March 31, 2000
--------------
(unaudited)
Revenues:
Rental and other income from operating leases $35,703
Interest income 1,212
-------
Total revenues 36,915
-------
Expenses:
Interest expense 19,467
Depreciation expense 10,678
Operating expense 4,358
Administration and other 1,531
-------
Total expenses 36,034
-------
Net Income $ 881
=======
The accompanying notes are an integral part
of these consolidated financial statements.
4
<PAGE>
Aircraft Finance Trust and Subsidiaries
Consolidated Statement of Cash Flows
(dollars in thousands)
Three Months
Ended
March 31, 2000
--------------
(unaudited)
Cash Flows from Operating Activities:
Net income $ 881
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense 10,678
Changes in assets and liabilities:
Rents and other receivables 540
Restricted cash 1,193
Other assets 103
Accounts payable and accrued liabilities (1,734)
Deferred rental income (1,595)
Security and other deposits 797
--------
Net cash provided by operating activities 10,863
--------
Cash Flows from Investing Activities:
Aircraft improvements (433)
--------
Net cash used in investing activities (433)
--------
Cash Flows from Financing Activities:
Repayment of notes payable (8,508)
--------
Net cash used in financing activities (8,508)
--------
Net Increase in Cash and Cash Equivalents 1,922
Cash and Cash Equivalents at Beginning of Period 72,682
--------
Cash and Cash Equivalents at End of Period $ 74,604
========
Supplemental Cash Flow Information:
Cash paid for interest expense $ 19,528
========
The accompanying notes are an integral part
of these consolidated financial statements.
5
<PAGE>
Aircraft Finance Trust and Subsidiaries
Consolidated Statement of Changes in Beneficial Interest Holders' Equity
(dollars in thousands)
Beneficial
Interest
--------
(unaudited)
Issuance of Beneficial Interest (May 5, 1999) $39,087
Net income 8,457
-------
Balance at December 31, 1999 47,544
Net income 881
-------
Balance at March 31, 2000 $48,425
=======
The accompanying notes are an integral part
of these consolidated financial statements.
6
<PAGE>
Aircraft Finance Trust and Subsidiaries
Notes to Consolidated Financial Statements
(unaudited)
March 31, 2000
Note 1 - Organization
Aircraft Finance Trust is a special-purpose statutory business trust
that was formed on April 13, 1999 under the laws of Delaware. Aircraft Finance
Trust and its two subsidiaries (collectively "Aircraft Finance") were formed to
conduct certain limited activities, including buying, owning, leasing, selling
commercial jet aircraft and related activities.
On May 5, 1999, Aircraft Finance completed a securitization transaction
in which it received proceeds from a private placement offering of notes,
received proceeds from the issuance of beneficial interest certificates and
simultaneously paid for the acquisition of 36 commercial jet aircraft.
Note 2 - Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles and the
rules and regulations of the Securities and Exchange Commission for interim
financial statements. Accordingly, these interim statements do not include all
of the information and disclosures required for annual financial statements. In
the opinion of management, all adjustments (consisting solely of adjustments of
a normal recurring nature) necessary for a fair statement of these interim
results have been included. All intercompany accounts and transactions have been
eliminated. The results for the interim periods are not necessarily indicative
of the results to be expected for the entire year.
These interim unaudited consolidated financial statements should be
read in conjunction with Aircraft Finance's consolidated financial statements
and accompanying notes included in the Annual Report on Form 10-K for the year
ended December 31, 1999 filed with the Securities and Exchange Commission.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. While management believes that the estimates and related
assumptions used in the preparation of the consolidated financial statements are
appropriate, actual results could differ from those estimates. Significant
estimates are made in the assessment of the collectibility of receivables,
depreciable lives and estimated salvage values of leased aircraft and estimates
of expected maintenance and overhaul costs in connection with certain leases of
aircraft.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
On May 5, 1999, Aircraft Finance issued $1,209 million of Asset Backed
Notes (the "Initial Notes"). The Initial Notes were issued in five classes;
Class A-1, Class A-2, Class B, Class C and Class D. The Initial Notes were
issued simultaneously with the execution of an agreement for the sale of the
beneficial interest of Aircraft Finance for $39 million and an agreement to
acquire 36 commercial jet aircraft for $1,196 million. On January 20, 2000 four
classes of the Initial Notes were exchanged for four corresponding classes of
new notes (the "Exchange Notes"), as more fully discussed below. The remaining
outstanding Initial Notes and the outstanding Exchange Notes are together
referred to as the Notes.
Aircraft Finance is a special purpose entity which owns aircraft
subject to operating leases. Aircraft Finance's business consists of aircraft
leasing activities. Aircraft Finance may also engage in acquisitions of
additional aircraft and sales of aircraft. Any acquisitions of additional
aircraft and the related issuance of additional notes will require confirmation
by the rating agencies that they will not lower, qualify or withdraw their
ratings on the outstanding Notes as a result. Aircraft Finance's cash flows from
such activities will be used to service the interest and principal on the
outstanding Notes and to make distribution of remaining amounts to the holders
of the beneficial interest certificates, after the payment of expenses incurred
by Aircraft Finance.
Aircraft Finance's ability to generate sufficient cash from its
aircraft assets to service the outstanding Notes will depend primarily on the
rental rates it can achieve on leases, the lessees' ability to perform according
to the terms of the leases and the prices it can achieve on any aircraft sales.
Aircraft Finance's ability to service the outstanding Notes will also depend on
the level of Aircraft Finance's operating expenses, including maintenance
obligations that are expected to increase as the aircraft age, and any
unforeseen contingent liabilities. The indenture governing the Notes requires
that Aircraft Finance maintain a cash reserve balance on deposit in a
collections account and permits Aircraft Finance to establish a credit facility,
in order to provide a source of liquidity for Aircraft Finance's obligations.
Any statements contained herein that are not historical facts, or that
might be considered an opinion or projection, whether expressed or implied, are
meant as, and should be considered, forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are based on assumptions and opinions concerning a variety of known
and unknown risks. If any assumptions or opinions prove incorrect, any
forward-looking statements made on that basis may also prove materially
incorrect.
Recent Developments
On January 20, 2000, Aircraft Finance completed an exchange offer
whereby Aircraft Finance issued four classes of new notes, the Exchange Notes,
designated Class A-1, A-2, B and C, in exchange for the four corresponding
classes of the Initial Notes. The terms of the Exchange Notes are identical in
all material respects to the Initial Notes, except that the Exchange Notes are
registered under the Securities Act of 1933, as amended. The Class D Notes were
not exchanged and remain unchanged. $3 million of the Class A-2 Initial Notes
were not tendered in the exchange offer and remain outstanding.
Under the terms of the indenture, Aircraft Finance is required to
obtain annual appraisals of its aircraft. In February 2000, Aircraft Finance
received appraisals of the adjusted base values of the aircraft as of December
8
<PAGE>
31, 1999 from three independent appraisers that are members of the International
Society of Transport Aircraft Trading, as required by the indenture. The
aggregate of the average of the three appraisals (the current appraised value)
of the aircraft at December 31, 1999 was $1,256.1 million. The appraisals at
December 31, 1999 did not indicate a decline in value of the aircraft
sufficiently in excess of the value decline assumed under the terms of the
indenture to require excess cash flows to be redirected to the Class A Notes.
In February 2000, the B737-300 aircraft formerly leased to a Dutch
lessee was delivered for lease to a lessee based in the Philippines for a lease
term of 57 months at a lower rental rate than the former lease. The aircraft
with respect to this lessee represents approximately 2.6% of the aggregate
appraised value at December 31, 1999.
In March 2000, Aircraft Finance entered into a restructuring agreement
with Canadian Airlines, a lessee of two Airbus A320-200 aircraft. Under the
restructuring agreement, Canadian Airlines, a subsidiary of Air Canada, was
replaced by Air Canada Capital LTD as the new lessee. These leases are
guaranteed by Air Canada. Pursuant to this restructuring, the cash security
deposits of $1.5 million held by Aircraft Finance in connection with these
aircraft were returned to Canadian Airlines. As of March 31, 2000, all rent
amounts due under these leases had been paid. The two aircraft with respect to
this lessee represent approximately 4.5% of the aggregate appraised value of the
aircraft at December 31, 1999.
In April 2000, Aircraft Finance entered into an agreement, for one
MD-83 aircraft currently leased to an Italian lessee, to extend the lease to
November 2001 at a lower rental rate. The aircraft with respect to this lessee
represents approximately 1.9% of the aggregate appraised value at December 31,
1999.
The B767-300ER aircraft currently on lease with a Swedish lessee, has a
lease expiration date in May 2000. Aircraft Finance has entered into a letter of
intent to lease this aircraft to a Canadian lessee for a lease term of 36 months
with an anticipated delivery date in May 2000.
At March 31, 2000 there were two existing lessees on non-accrual
status. The total amount of rental payments and maintenance reserve payments
outstanding under the leases for the three aircraft from these two existing
lessees amounted to approximately $5.7 million as of March 31, 2000. One of
these two lessees, based in Brazil, owed approximately $1.6 million for
outstanding rental payments and maintenance reserve payments at March 31, 2000.
Aircraft Finance holds security deposits of $0.9 million against these
arrearages. The aircraft with respect to this lessee represents approximately
2.7% of the aggregate appraised value at December 31, 1999. The other lessee,
based in Turkey, owed approximately $4.1 million for outstanding rental payments
and maintenance reserve payments at March 31, 2000. Aircraft Finance holds
security deposits and letters of credit in the aggregate of $1.1 million against
these arrearages. The two aircraft with respect to this lessee represents
approximately 5.2% of the aggregate appraised value at December 31, 1999. In
April 2000, the Turkish lessee returned one of the two aircraft early. This
aircraft was re-delivered to a new lessee (based in Belgium) in April 2000 for a
lease term of 36 months at a lower rental rate.
In May 2000, the B737-300 aircraft leased to TransBrasil was returned
early. The aircraft is currently being remarketed for lease. Aircraft Finance is
in the process of quantifying and evaluating the likelihood of and amount of
collections with respect to its claim for outstanding rent, maintenance
9
<PAGE>
reserves, accrued interest and re-delivery costs. The aircraft with respect to
this lessee represents approximately 2.7% of the aggregate appraised value at
December 31, 1999.
Results of Operations
Aircraft Finance reported net income of $0.9 million during the three
months ended March 31, 2000, on total revenues of $36.9 million. Aircraft
Finance's revenues consisted of rental income from operating leases and interest
income earned on cash balances.
Rental income from aircraft subject to operating leases during the
three months ended March 31, 2000 was $35.7 million. The defaults of the two
leases based in Brazil and Turkey negatively impacted rental and other income
from operating leases by approximately $2.0 million during the three months
ended March 31, 2000. Rental income from operating leases during the three
months ended March 31, 2000 includes supplemental rental income of $4.1 million.
Supplemental rental payments are variable based on aircraft flight hours or
cycles.
Interest income during the three months ended March 31, 2000 was $1.2
million. Interest income is earned on Aircraft Finance's cash balances which are
invested in short-term highly liquid investments as permitted by the indenture.
The amount of interest income earned varies based upon the current interest
rates paid on such investments and the level of cash balances held by Aircraft
Finance.
Interest expense, net of interest rate swap proceeds of $1.0 million,
was $19.5 million during the three months ended March 31, 2000. Interest expense
is paid on Aircraft Finance's outstanding Notes issued on May 5, 1999. The
weighted average interest rate on the Notes during the three months ended March
2000 was 6.59% and the outstanding balance of the Notes at March 31, 2000 was
$1,167.7 million. Interest expense varies based on the actual interest rates on
the floating rate Notes, the interest rate swap costs or proceeds and the
outstanding principal balances of the Notes.
Depreciation expense during the three months ended March 31, 2000 was
$10.7 million.
Operating expense during the three months ended March 31, 2000 was $4.4
million. Operating expense consists primarily of aircraft maintenance expense
and lease related costs. Most of Aircraft Finance's lease contracts require the
lessee to bear the obligation for maintenance costs on airframes and engines,
and require the lessee to make certain payments to the lessor, calculated on
measures of usage to cover the expected costs of scheduled maintenance charges,
including major airframe and engine overhauls. Reserves are maintained at
amounts considered adequate to cover those expected payments for maintenance
costs.
Administrative and other expenses during the three months ended March
31, 2000 were $1.5 million. These expenses consist primarily of fees paid to the
service providers and other general and administrative costs. The most
significant of these fees was the servicer fee, which amounted to $1.1 million.
A significant portion of the fees paid to the Servicer correspond to rental
payments due and received. These fees are based upon a fixed percentage of
rental receipts, and will vary with rental income of Aircraft Finance.
Liquidity
Aircraft Finance held cash and cash equivalents of $74.6 million, and
restricted cash of $18.3 million at March 31, 2000. The liquidity reserve
amount, which is included in cash and cash equivalents, was $52 million at March
31, 2000. The liquidity reserve amount is required under the terms of the
indenture and is intended to serve as a source of liquidity for Aircraft
Finance's maintenance obligations and other contingent costs.
10
<PAGE>
Cash Flows from Operating Activities
Aircraft Finance's cash flows from operating activities depend on many
factors including, but not limited to, the performance of lessees and Aircraft
Finance's ability to re-lease aircraft, the average interest rates of the Notes,
the efficiency of its interest rate hedging policies, the ability of interest
rate swap providers to perform under the terms of the swap agreements and
whether Aircraft Finance will be able to refinance certain subclasses of Notes
that have not been repaid with lease cash flows.
Net cash provided by operating activities for the three months ended
March 31, 2000 amounted to $10.9 million, primarily reflecting non-cash
depreciation expense of $10.7 million, net income of $0.9 million, a decrease in
restricted cash of $1.2 million and an increase in security and other deposits
of $0.8 million. These were offset by decreases in accounts payable and accrued
liabilities of $1.7 million and deferred rental income of $1.6 million.
Cash Flows from Investing and Financing Activities
Net cash used in investing activities for the three months ended March
31, 2000 amounted to $0.4 million for capitalized aircraft improvements and
aircraft delivery costs.
Net cash used in financing activities for the three months ended March
31, 2000 amounted to $8.5 million due to principal repayment on the Notes. As a
result, the balance of these Notes were $1,167.7 million at March 31, 2000.
Generally, principal and interest is repaid on these Notes monthly based upon
the cash collected, the anticipated expenses and the cash balances held by
Aircraft Finance on the calculation date. As a result, monthly principal
payments on the Notes will vary depending on Aircraft Finance's revenues and
expenses for the month.
At March 31, 2000, Aircraft Finance was a party to five interest rate
swap agreements. The net aggregate amounts due to be paid or received by
Aircraft Finance under these agreements is determined monthly and is due on the
same day as the payments under the Notes. The net economic effect of these
interest rate swaps was to hedge Aircraft Finance's variable interest rate
exposure from movements in interest rates over the duration of the lease terms.
Please see "Item 3. Quantitative and Qualitative Disclosures about Market Risk"
for further information about these interest rate swap agreements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Interest incurred by Aircraft Finance on the Notes and the rental
income received by Aircraft Finance under operating leases are based on
combinations of variable and fixed measures of interest rates. Aircraft Finance
is exposed to interest rate risk to the extent that the mix of variable and
fixed interest obligations under the Notes do not correlate to the mix of
variable and fixed rents under operating leases. Aircraft Finance has engaged
advisors to monitor interest rates in order to mitigate its exposure to
unfavorable variations. Aircraft Finance utilizes interest rate swaps that shift
the risk of fluctuations in floating rates to the counterparty in exchange for
fixed payments by Aircraft Finance. Risks in the use of these instruments arise
from the possible inability of the counterparties to meet the terms of their
contracts and from market movements in securities values and interest rates.
The controlling trustees of Aircraft Finance, with the assistance of
Bankers Trust Company and Lehman Brothers Inc., are responsible for reviewing
and approving the overall interest rate management policies and transaction
authority limits. Counterparty risk will be monitored on an ongoing basis.
Counterparties will be subject to the prior approval of the controlling
trustees. Currently, Aircraft Finance's counterparty is an affiliate of Lehman
Brothers Inc. Future counterparties will consist primarily of the affiliates of
11
<PAGE>
major United States and European financial institutions, including
special-purpose derivative vehicles, that have credit ratings, or that provide
collateralization arrangements, consistent with maintaining the ratings of the
Notes.
Aircraft Finance is a party to five classes of Notes. The estimated
fair value of these Notes at March 31, 2000 was approximately $1,149.5 million.
The terms of each class of the Notes, including the outstanding principal amount
at March 31, 2000, are as follows:
Outstanding
Class of Principal Expected Final Final
Notes Amount Interest Rate Payment Date Maturity Date
----- ------ ------------- ------------ -------------
Class A-1 $ 512,500,000 LIBOR + 0.48% May 15, 2004 May 15, 2024
Class A-2 360,393,238 LIBOR + 0.50% June 15, 2008 May 15, 2024
Class B 124,793,872 LIBOR + 1.15% May 15, 2016 May 15, 2024
Class C 106,000,000 8.00% July 15, 2016 May 15, 2024
Class D 64,000,000 11.00% August 15, 2016 May 15, 2024
-------------
$1,167,687,110
Aircraft Finance was a party to five interest rate swap agreements at
March 31, 2000. Under the agreements, Aircraft Finance will pay a fixed rate of
interest on the notional amount to the counterparty and, in turn, the
counterparty will pay Aircraft Finance a rate of interest on the notional amount
based on LIBOR.
The following table presents, as of March 31, 2000, the terms of
Aircraft Finance's interest rate swap agreements:
Fixed Rate to be Rate to be
Notional paid by Aircraft received by Maturity Estimated
Amount Finance Aircraft Finance Date fair value
------ ------- ------- ---- ----------
$ 80,000,000 5.23% LIBOR April 15, 2000 $ 40,655
60,000,000 5.50% LIBOR January 15, 2002 1,534,799
175,000,000 5.56% LIBOR October 15, 2002 6,170,444
345,000,000 5.65% LIBOR January 15, 2004 16,700,794
230,000,000 5.71% LIBOR November 15, 2004 12,655,501
Aircraft Finance expects to enter into additional swaps, or sell at
market values or unwind part or all of its initial swaps and any future swaps on
a periodic basis in its efforts to mitigate its exposure to unfavorable changes
in interest rates. Any changes in Aircraft Finance's policy regarding its use of
interest rate hedging products will be subject to periodic review by the rating
agencies.
12
<PAGE>
Part II. Other Information
--------------------------
Item 6. Exhibits and Reports of Form 8-K
a. Exhibits (numbered in accordance with Item 601 of Regulation S-K)
27. Financial Data Schedule (in electronic format only)
b. Reports on Form 8-K
During the quarterly period ended March 31, 2000, Aircraft Finance filed
reports on Form 8-K dated January 18, 2000, February 15, 2000 and March
15, 2000. Such reports on Form 8-K included copies of the monthly
reports to holders of the Notes.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AIRCRAFT FINANCE TRUST
by Wilmington Trust Company,
not in its individual capacity but
solely as the Owner Trustee
May 10, 2000 By: /S/CHARISSE L. RODGERS
------------ ----------------------------------------
Date Name: Charisse L. Rodgers
Title: Senior Financial Services Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/S/DAVID H. TREITEL Independent Controlling Trustee May 10, 2000
- ------------------------------ ------------
David H. Treitel
/S/RICHARD E. CAVANAGH Independent Controlling Trustee May 10, 2000
- ------------------------------ ------------
Richard E. Cavanagh
/S/WAYNE D. LIPPMAN Equity Trustee and Controlling May 10, 2000
- ------------------------------ Trustee ------------
Wayne D. Lippman
/S/CHARISSE L. RODGERS Owner Trustee May 10, 2000
- ------------------------------ ------------
Wilmington Trust Company, not
in its individual capacity but
solely as the Owner Trustee
14
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<ARTICLE>5
<MULTIPLIER>1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 92,879
<SECURITIES> 0
<RECEIVABLES> 3,582
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,199,485
<DEPRECIATION> 39,166
<TOTAL-ASSETS> 1,256,815
<CURRENT-LIABILITIES> 0
<BONDS> 1,167,687
<COMMON> 0
0
0
<OTHER-SE> 48,425
<TOTAL-LIABILITY-AND-EQUITY> 1,256,815
<SALES> 0
<TOTAL-REVENUES> 36,915
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 36,034
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,467
<INCOME-PRETAX> 881
<INCOME-TAX> 0
<INCOME-CONTINUING> 881
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 881
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
