Rule
424(b)(3)
Registration Statement No. 333-
45101
Pricing Supplement No. 24
Dated September 8, 1998
(To Prospectus dated March 10, 1998 and
Prospectus Supplement dated March 10, 1998)
INTERNATIONAL LEASE FINANCE CORPORATION
$750,000,000
Medium-Term Notes, Series J
PRINCIPAL AMOUNT: U.S. $100,000,000
ISSUE PRICE: 100%
CUSIP: 45 974 VVH8
ORIGINAL ISSUE DATE: September 11, 1998
INTEREST RATE: 5.335%
OVERDUE RATE (IF ANY): N/A
REDEEMABLE BY THE COMPANY ON OR AFTER: See "Additional Terms -
Reset
of Interest Rate for Second Fixed
Rate
Period"
REPAYABLE AT THE OPTION OF THE HOLDER ON: See "Additional Terms
- -
Put Option"
OPTIONAL RESET DATES: See "Additional Terms - Reset of Interest
Rate
for Second Fixed Rate Period"
EXTENSION PERIODS: N/A
FINAL MATURITY: October 16, 2006
REPURCHASE PRICE (FOR ORIGINAL DISCOUNT NOTES): N/A
TYPE OF NOTE (CHECK ONE):
BOOK-ENTRY NOTE X
---
CERTIFICATED NOTE
---
OTHER PROVISIONS:
UNDERWRITER: AIG Financial Securities Corp.
DISCOUNT: 0.35%
CALCULATION AGENT: AIG Financial Securities Corp.
<PAGE>
ADDITIONAL TERMS
The Notes are described in the Prospectus and the
Prospectus Supplement for Medium Term Notes, Series J referenced
above, and reference is made thereto for a detailed summary of
additional provisions of the Notes. The description of the
particular terms of the Notes set forth in this Pricing
Supplement
supplements, and to the extent inconsistent therewith replaces,
the
description of the terms and provisions of the "Offered Debt
Securities" in the Prospectus and the "Notes" in the Prospectus
Supplement. Capitalized terms used but undefined herein shall
have
the meanings given such terms in such Prospectus and Prospectus
Supplement.
Interest Rates
During the period commencing with the Original Issue
Date
to but excluding October 15, 2001, the Notes will bear interest
at a
rate of 5.335% per annum and interest will be computed and paid
on the
basis of a 360-day year of twelve 30-day months.
If the Calculation Agent has not given the Put Notice
(as
defined below) or the Company has not repurchased the Notes (see
"Reset of Interest Rate for Second Fixed Rate Period" below),
then
during the period from and including October 15, 2001 to the
Maturity
Date (the "Second Fixed Rate Period"), the Notes will bear
interest
at a fixed rate calculated as described below (see "Reset of
Interest
Rate for Second Fixed Rate Period" below).
Put Option
The Calculation Agent has the right to require the
Company
to repurchase all (but not less than all) of the Notes on October
15,
2001 at a purchase price equal to 100% of the principal amount
thereof, plus accrued but unpaid interest to but excluding
October
15, 2001 (the "Redemption Price"), by delivering written notice
thereof to the Company on behalf of all (but not fewer than all)
holders of the Notes (the "Put Notice"). Such Put Notice shall
be
given no later than 9:00 a.m. (New York time) on October 8, 2001.
The Calculation Agent shall give the Put Notice if the holders of
a
majority in principal amount of the Notes request the Calculation
Agent to give the Put Notice, in which event the Put Notice shall
be
binding on all Noteholders; the Calculation Agent shall not give
the
Put Notice absent such request of the holders of a majority in
principal amount of the Notes. In the event the Put Notice is
timely
given, the Company shall repurchase the Notes at the Redemption
Price
on October 15, 2001.
If required by the Calculation Agent, each holder shall
indicate its election to have the Calculation Agent deliver the
Put
Notice to the Company by delivering written notice of such
election
to the Calculation Agent by no later than 12:00 noon (New York
time)
on October 4, 2001.
Reset of Interest Rate for Second Fixed Rate Period
If the Calculation Agent has not delivered the Put
Notice
to the Company in accordance with the terms set forth under "Put
Option" above, the Company and the Calculation Agent, on October
8,
2001, shall undertake the following actions to calculate the
fixed
rate of interest to be paid on the Notes during the Second Fixed
Rate
Period. All references to specific hours are references to
prevailing New York time. Each notice, bid or offer (including
those
given by the Reference Dealers [as defined below]) shall be given
telephonically and shall be confirmed as soon as possible by
facsimile to each of the Calculation Agent and the Company. The
times set forth below are guidelines for action by the Company
and
the Calculation Agent, and each shall use its best efforts to
adhere
to such times. The Company shall use its best efforts to cause
the
Reference Dealers to take all actions contemplated below in as
timely
a manner as possible.
A holder shall indicate its election to sell its Note
to,
and purchase Designated Treasury Bonds from, the Final Dealer or
Final Dealers (as defined below) in accordance with the terms set
forth in paragraph (e) below by notifying the Calculation Agent
of
such election by no later than 9:15 a.m. (New York time) on
October
8, 2001. If the Calculation Agent has not received written
election
for the sale of at least $25,000,000 aggregate principal amount
of
the Notes to the Final Dealer or Final Dealers, the Calculation
Agent
shall select pro rata from all holders Notes in a principal
amount
that, when aggregated with the principal amount of Notes for
which
the Calculation Agent has received a written election to sell,
will
total $25,000,000, and shall immediately notify such holders of
such
selection. The holders of such randomly selected Notes shall
sell
their Notes to, and purchase Designated Treasury Bonds from, the
Final Dealer or Final Dealers in accordance with the terms set
forth
in paragraph (e) below.
(a) At 9:00 a.m., the Company shall provide to the
Calculation Agent the names of four financial institutions
that
deal in the Company's debt securities and have agreed to
participate as reference dealers in accordance with the
terms
set forth below (the "Reference Dealers") and, for each
Reference Dealer, the name of and telephone and facsimile
numbers for one individual who will represent such Reference
Dealer.
(b) At 9:15 a.m., the Calculation Agent shall:
(i) determine and provide to the Company the 5-
year
Treasury bond yield determined at or about such time
(the
"Designated Treasury Yield") based on an issue of 5-
year
Treasury bonds chosen by the Calculation Agent (the
"Designated Treasury Bonds");
(ii) calculate and provide to the Company the
"Premium", which shall equal the present value
(expressed
as a percentage rounded to four decimal places) of the
Treasury Rate Difference applied over the 10 semi-
annual
periods from October 15, 2001 to the Maturity Date,
discounted at the Discount Rate divided by two, where:
"Treasury Rate Difference" means the difference
between 4.91% (the "Initial Treasury Yield") minus the
Designated Treasury Yield; and
"Discount Rate" means the sum of the Designated
Treasury Yield plus 0.50%; and
(iii) provide to the Company the aggregate
principal amount of the Designated Treasury Bonds that
the
Holders will purchase (the "Hedge Amount") in the event
that all of the Notes are sold to one or more of the
Reference Dealers in accordance with paragraph (e)
below.
(c) The Calculation Agent immediately thereafter shall
contact each of the Reference Dealers and request that each
Reference Dealer provide to the Calculation Agent the
following
firm bid and firm offer for the benefit of the Holders
(which
bid and offer shall remain firm for 15 minutes):
(i) a firm bid (on an all-in basis), expressed as
a
spread to the Designated Treasury Bonds (using, for
such
purposes, the Designated Treasury Yield), at which such
Reference Dealer would purchase any Notes offered (up
to
Notes in a principal amount equal to $100,000,000,
provided that such Reference Dealer shall not be
obligated
to purchase Notes in a principal amount less that
$25,000,000) at a price equal to 100% plus the Premium
for
settlement on the Redemption Date (the lowest of such
spreads, the "Spread"); and
(ii) a firm offer (on an all-in basis) to sell
Designated Treasury Bonds in a principal amount equal
to
the Hedge Amount at a yield equal to the Designated
Treasury Yield for settlement on the Redemption Date.
(d) At 9:30 a.m., the following shall occur following
receipt of the bids and offers requested in paragraph (c)
above:
(i) the Calculation Agent shall calculate and
provide
to the Company the "Adjusted Coupon", which shall be
the
fixed rate of interest on the Notes required to produce
a
yield on the Notes equal to the sum of the Designated
Treasury Yield and the Spread given a purchase price of
100% plus the Premium;
(ii) the Interest Rate on the Notes shall be
adjusted
and shall equal, effective from and including October
15,
2001 to the Maturity Date, the Adjusted Coupon; and
(iii) the Reference Dealer providing the
Spread
shall be deemed the "Final Dealer"; provided that if
two or
more Reference Dealers shall have quoted such Spread,
the
Company shall determine which of such Reference Dealers
shall be the Final Dealer or the Final Dealers (and, in
the
latter case, the allocation to be made between them).
(e) The Holders:
(i) shall sell Notes to the Final Dealer or Final
Dealers in a principal amount which shall be not less
than
$25,000,000 nor more than $100,000,000 at a price equal
to
100% plus the Premium; and
(ii) shall purchase Designated Treasury Bonds from
the
Final Dealer or Final Dealers in a principal amount
equal
to the Hedge Amount (adjusted pro rata based on the
amount
of Notes sold in the event that less than $100,000,000
principal amount is sold), at a price based on the
Designated Treasury Yield, in each case for settlement
on
the Redemption Date and, in the case of more than one
Final
Dealer, according to the allocation designated by the
Company under paragraph (d)(iii) above.
If the Calculation Agent determines that (i) a Market
Disruption Event (as defined below) has occurred or (ii) two or
more
of the Reference Dealers have failed to provide indicative or
firm
bids or offers in a timely manner substantially as provided
above,
the steps contemplated above shall be delayed until the next
trading
day on which there is no Market Disruption Event and no such
failure
by two or more Reference Dealers. "Market Disruption Event"
shall
mean any of the following: (i) a suspension or material
limitation
in trading in securities generally on the New York Stock Exchange
or
the establishment of minimum prices on such exchange: (ii) a
general
moratorium on commercial banking activities declared by either
federal or New York State authorities; (iii) any material adverse
change in the existing financial, political or economic
conditions in
the United States or America or elsewhere; (iv) an outbreak or
escalation of major hostilities involving the United States of
America or the declaration of a national emergency or war by the
United States of America; or (v) any material disruption of the
U.S.
government securities market, U.S. corporate bond market and/or
U.S.
federal wire system.
U.S. Federal Income Tax Considerations
PROSPECTIVE PURCHASERS OF NOTES SHOULD CONSULT THEIR
OWN
TAX ADVISORS CONCERNING THE UNITED STATES FEDERAL INCOME TAX AND
ANY
OTHER TAX TREATMENT OF THE NOTES.
The following summary of the principal United States
federal income tax consequences of ownership of the Notes deals
only
with a Note held as a capital asset by an initial purchaser who
or
that is a U.S. Holder (as defined in the Prospectus Supplement).
It
does not discuss the rules that may apply to special classes of
holders such as life insurance companies, tax-exempt
organizations,
banks, dealers in securities, currencies or commodities, persons
that
hold Notes as a hedge or hedged against interest rate risks or
that
are part of a straddle or conversion transaction, or persons
whose
functional currency is not the U.S. dollar. The summary is based
on
current provisions of the Internal Revenue Code of 1986, as
amended
(the "Code"), its legislative history, existing and proposed
regulations thereunder, published rulings and court decisions,
all as
in effect on the date hereof and all subject to change at any
time,
perhaps with retroactive effect.
The Notes will be subject to the special rules, set out
in
Treasury Regulations (the "Regulations"), governing contingent
payment debt obligations. Under the Regulations, a U.S. Holder
will
be required annually to include interest in income in respect of
the
Notes determined by reference to (i) the annual yield the Company
would pay, as of the Original Issue Date, on a fixed rate note
with
no contingent payments, but with terms and conditions otherwise
comparable to those of the Notes (the "comparable yield") and
(ii) a
"projected payment schedule" constructed for the Note (as
described
below). Using this comparable yield and the projected payment
schedule, rules are applied that are similar to the rules that
apply
for accruing original issue discount on a noncontingent debt
instrument with that yield.
These rules will likely have the effect of requiring
U.S.
Holders to include interest in income in respect of the Notes
prior
to the receipt of cash attributable to such income.
More specifically, the amount of interest includible in
income for a taxable year by a U.S. Holder will be the sum of the
"daily portions" of interest with respect to the Note for each
day
during the taxable year or portion of the taxable year on which
the
U.S. Holder owns the Note. The "daily portion" is determined by
allocating to each day in any "accrual period" a pro rata portion
of
the interest allocable to the accrual period. The "accrual
period"
may be any length selected by a U.S. Holder and may vary over the
term of the Note so long as no accrual period is longer than one
year.
The amount of interest allocable to an accrual period
is
the product of the Note's "adjusted issue price" at the beginning
of
such accrual period and the comparable yield (adjusted for the
length
of the accrual period) described above. The "adjusted issue
price"
of the Note at the start of any accrual period is the sum of the
issue price of such Note plus the accrued interest for each prior
accrual period less any projected payments of interest deemed
received for the period, determined in the manner described
below.
The amount of interest deemed received in any accrual
period is based on a "projected payment schedule" for the Notes,
which the Company will construct. The "projected payment
schedule"
is a hypothetical schedule for payments on the Notes as of the
issue
date that would, if paid in the assumed amounts at the assumed
times,
produce the comparable yield (as described above). To construct
the
projected payment schedule, the Company will use the actual
amounts
and timing of payments that are known as of the issue date.
Projections of payments that are to be determined based upon the
reset mechanism will be based upon forward interest rates and
similar
market-based information.
U.S. Holders are required to compute the difference
between
the payments made on the Notes during a taxable year and the
projected payments for the year. If the actual payments made
during
the year exceed the projected payments, the excess is treated as
an
additional payment of interest. If the actual payments are less
than
the projected payments, the difference first reduces the amount
of
interest otherwise taken into account for the year, and any
excess
(the "excess negative adjustment") is treated as an ordinary loss
for
the U.S. Holder to the extent of the interest that was included
in
respect of the instrument in prior taxable years (as reduced by
previous negative adjustments). Any remaining excess negative
adjustment is carried forward and treated as a negative
adjustment
for the succeeding taxable year. Any excess negative adjustment
carryforward not ultimately used to offset future interest
accruals
effectively reduces the amount of gain, or increases the amount
of
loss, realized at maturity or earlier redemption of the Notes.
The Company's projected payment schedule will be
available
from Pamela S. Hendry, International Lease Finance Corporation,
1999
Avenue of the Stars, 39th Floor, Los Angeles, California 90067
(telephone no.: (310) 788-1999). A U.S. Holder is required to
use
the comparable yield and projected payment schedule determined by
the
Company in determining its interest accruals in respect of the
Notes,
unless such U.S. Holder timely discloses and justifies on its
federal
income tax return the use of a different comparable yield and
projected payment schedule to the Internal Revenue Service.
THE COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE IS
NOT
PROVIDED FOR ANY PURPOSE OTHER THAN THE DETERMINATION OF A U.S.
HOLDER'S INTEREST ACCRUALS IN RESPECT OF THE NOTES, AND THE
COMPANY
MAKES NO REPRESENTATION REGARDING THE ACTUAL AMOUNT OF PAYMENTS
WITH
RESPECT TO THE NOTES, WHICH MAY BE LESS THAN THE PROJECTED
PAYMENTS.
Gain or loss at maturity or earlier redemption of the
Notes
will be determined by the difference, if any, between the amount
received by the U.S. Holder at such time and the projected amount
of
such payment under the projected payment schedule. Any gain
recognized by a U.S. Holder at maturity will be treated as
interest
income, and any loss recognized by a U.S. Holder will be treated
as
ordinary loss to the extent of the U.S. Holder's prior interest
inclusions reduced by prior ordinary losses attributable to net
negative differences between actual contingent payments and
projections of such payments, and thereafter generally as capital
loss.
Any gain upon sale or exchange of the Notes will be
interest income; any loss will be ordinary loss to the extent of
interest included as income in the current or previous taxable
years
by the U.S. Holder in respect of the Notes, and thereafter,
capital
loss.
In general, information reporting requirements will
apply
to all payments in respect of a Note made within the United
States to
a non-corporate U.S. Holder and "backup withholding" at a rate of
31%
will apply to such payments if the U.S. Holder fails to provide
an
accurate taxpayer identification number or is notified by the
Internal Revenue Service that it has failed to report all
interest
and dividends required to be shown on its federal income tax
returns.
Supplemental Plan of Distribution
The Company has agreed to sell to AIG Financial
Securities
Corp., and AIG Financial Securities Corp. has agreed to purchase
from
the Company, the Notes. See "Plan of Distribution" in the
attached
Prospectus Supplement.
This Pricing Supplement and the attached Prospectus
Supplement and Prospectus may be used by AIG Financial Securities
Corp. in connection with offers and sales related to secondary
market
transaction in the Notes. AIG Financial Securities Corp. may act
as
principal or agent in such transactions. Such sales will be made
at
prices related to prevailing prices at the time of sale.
The offering is being made pursuant to the provisions
of
Rule 2720 of the National Association of Securities Dealers, Inc.
by
AIG Financial Securities Corp., an affiliate of the Company.
