<PAGE> 1
This filing is made Pursuant
to Rule 424(b)(2) under
the Securities Act of
1933 in connection with
Registration Number 333-74095
PROSPECTUS SUPPLEMENT
(TO THE PROSPECTUS DATED APRIL 26, 2000)
$150,000,000
6 3/4% NOTES DUE OCTOBER 1, 2002
(ILFC LOGO)
INTERNATIONAL LEASE FINANCE CORPORATION
------------------------
We are offering $150,000,000 of 6 3/4% Notes due October 1, 2002. We will pay
interest on the notes semiannually on April 1 and October 1, beginning April 1,
2001. The notes are not guaranteed and are unsecured obligations ranking equally
with our other debt obligations.
We may not redeem the notes before the maturity date listed above.
We do not intend to list the notes on any securities exchange and the notes will
not have an established trading market when issued. The notes will be held in
global form on our behalf by The Depository Trust Company, as depositary.
The Underwriter proposes to offer the notes from time to time for sale in
negotiated transactions, or otherwise, at varying prices to be determined at the
time of each sale. The Underwriter has agreed to purchase the notes from us at
99.811% of their principal amount ($149,716,500 aggregate proceeds to us),
subject to the terms and conditions of the underwriting agreement between the
Underwriter and us.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The notes will be delivered on or about September 25, 2000 through the
book-entry facilities of The Depository Trust Company.
------------------------
LEHMAN BROTHERS
------------------------
The date of this Prospectus Supplement is September 20, 2000.
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IMPORTANT NOTICE ABOUT INFORMATION IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
This document is in two parts. The first part is this prospectus
supplement, which describes the specific terms of the notes we are offering. The
second part, the base prospectus, gives more general information, some of which
may not apply to the notes we are offering.
IF THE DESCRIPTION OF THE NOTES VARIES BETWEEN THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS, YOU SHOULD RELY ON THE INFORMATION IN THIS
PROSPECTUS SUPPLEMENT.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR IN THE ACCOMPANYING PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
OFFERING TO SELL THE NOTES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS IS ACCURATE AS OF ANY DATE LATER THAN SEPTEMBER 20, 2000.
-------------------------
We include cross references in this prospectus supplement to captions in
the prospectus and this prospectus supplement where you can find further related
discussions. The following table of contents tells you where to find these
captions.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Use of Proceeds............................................. S-3
Description of the Notes.................................... S-3
Underwriting................................................ S-4
</TABLE>
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary..................................................... 3
Where You Can Find More Information......................... 5
The Company................................................. 5
American International Group, Inc........................... 6
Use of Proceeds............................................. 6
Prospectus Supplement....................................... 6
Description of Debt Securities.............................. 6
Plan of Distribution........................................ 17
Experts..................................................... 18
Legal Matters............................................... 18
</TABLE>
S-2
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USE OF PROCEEDS
The net proceeds from the sale of our 6 3/4% Notes due October 1, 2002
after expenses of approximately $100,000, is estimated to be $149,616,500. We
intend to use the net proceeds to repay maturing commercial paper. As of
September 20, 2000, we had approximately $4.39 billion of commercial paper
outstanding with a weighted average interest rate of approximately 6.61%.
DESCRIPTION OF NOTES
The following information about the notes should be read together with the
information under "Description of Debt Securities" in the accompanying
prospectus. We will issue the notes under an Indenture dated as of November 1,
1991 (the "Indenture"), between the Company and U.S. Bank Trust National
Association (successor to Continental Bank, National Association), as Trustee
(the "Trustee"). The notes will rank equally with all our other unsecured and
unsubordinated indebtedness.
The notes will mature on October 1, 2002 and will bear interest at the
yearly rate of 6 3/4% from September 25, 2000. We will pay interest on the notes
twice each year on each April 1 and October 1, beginning on April 1, 2001, to
the persons in whose names the notes are registered on the close of business on
the preceding March 15 and September 15, respectively. However, we will pay
interest payable on October 1, 2002 to the persons to whom principal on the
notes will be paid. We will compute interest on the notes on the basis of a
360-day year consisting of twelve 30-day months.
The notes will not be redeemable prior to maturity and will not be subject
to any sinking fund.
S-3
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UNDERWRITING
We have agreed to sell the notes, subject to the terms and conditions set
forth in the underwriting agreement (the "Underwriting Agreement") between us
and Lehman Brothers Inc. (the "Underwriter"), to the Underwriter, who has agreed
to purchase from the Company the notes. The Underwriting Agreement provides that
the obligations of the Underwriter are subject to certain conditions precedent,
and also that the Underwriter will be obligated to purchase all of the notes if
any are purchased.
The Underwriter proposes to offer the notes from time to time for sale in
negotiated transactions, or otherwise, at varying prices to be determined at the
time of each sale. In connection with the sale of the notes, the Underwriter may
be deemed to have received compensation from us in the form of underwriting
discounts.
We estimate that our expenses associated with the offer and sale of the
notes will be $100,000.
We have agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as specified in the
Underwriting Agreement.
The notes are a new issue of securities and do not have an established
trading market. The Underwriter may purchase and sell the notes in the secondary
market from time to time, but is not obligated to do so and may discontinue
market making at any time without notice. We cannot give any assurances that
there will be a secondary market for the notes.
S-4
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PROSPECTUS
(ILFC LOGO)
INTERNATIONAL LEASE FINANCE CORPORATION
By this prospectus, we may offer:
DEBT SECURITIES
These securities will have an aggregate offering price of up to
$2,000,000,000 or an equivalent amount in U.S. dollars if any securities are
denominated in a currency other than U.S. dollars. We may offer these securities
in one or more series, with the same or different maturity dates, and at par or
with an original issue discount.
We will provide the specific terms of these securities in supplements to
this prospectus. You should read this prospectus and the prospectus supplement
carefully before you invest.
-------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS OR THE
PROSPECTUS SUPPLEMENT THAT WE HAVE REFERRED YOU TO. NO ONE IS AUTHORIZED TO
PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE
SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME
THAT THE INFORMATION IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT IS ACCURATE
AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS DOCUMENT.
-------------------------
The date of this prospectus is April 26, 2000
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary..................................................... 3
Where You Can Find More Information......................... 5
The Company................................................. 5
American International Group, Inc........................... 6
Use of Proceeds............................................. 6
Prospectus Supplement....................................... 6
Description of Debt Securities.............................. 6
Plan of Distribution........................................ 17
Experts..................................................... 18
Legal Matters............................................... 18
</TABLE>
2
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SUMMARY
This summary highlights selected information from this prospectus and may
not contain all of the information that is important to you. To understand the
terms of the debt securities we are offering by this prospectus, you should
carefully read this prospectus and the prospectus supplement that gives the
specific terms of the securities we are offering. You should also read the
documents we have referred you to in "Where You Can Find More Information" on
page 4 for information on us and our financial statements.
INTERNATIONAL LEASE FINANCE CORPORATION
Our primary business is acquiring new and used commercial jet aircraft and
leasing and selling those aircraft to domestic and foreign airlines. We also
sell commercial jet aircraft for our own account, for the account of airlines
and for the account of financial institutions.
We are an indirect wholly owned subsidiary of American International Group,
Inc. We are incorporated in the State of California and maintain our principal
executive offices at 1999 Avenue of the Stars, 39th Floor, Los Angeles,
California 90067. Our telephone number is (310) 788-1999 and our telecopier
number is (310) 788-1990.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for the periods indicated are set
forth below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
1995 1996 1997 1998 1999
----- ----- ----- ----- -----
<S> <C> <C> <C> <C>
1.48x 1.53x 1.63x 1.65x 1.82x
</TABLE>
We computed the ratios of earnings to fixed charges by dividing earnings by
fixed charges. For this purpose, "earnings" consist of income before income
taxes plus fixed charges (excluding capitalized interest), and "fixed charges"
consist of interest expense and capitalized interest.
THE DEBT SECURITIES WE MAY OFFER
We may offer up to $2,000,000,000 in debt securities. We may sell the debt
securities through underwriters or dealers, directly to purchasers or through
agents. The prospectus supplement and the pricing supplement, if one is used,
will describe the specific amounts, prices and terms of the debt securities.
THE DEBT SECURITIES
We may from time to time offer debt securities which are unsecured and
unsubordinated obligations of our Company. These debt securities will rank
equally with all of our other unsecured and unsubordinated debt.
We have summarized the general features of the debt securities below. We
encourage you to read the indenture which governs the debt. A copy of the
indenture is incorporated by reference as Exhibit 4 to this Registration
Statement and is available to the public. See "Where You Can Find More
Information."
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The following are general indenture provisions that relate to the debt
securities offered by this prospectus.
- The indenture does not limit the amount of debt that we may issue or
provide a holder of debt securities offered by this prospectus with any
protection from the consequences of a highly leveraged transaction
involving us.
- The indenture allows us to merge or consolidate with another company, or
sell all or substantially all of our assets to another company, subject
to certain conditions. If these events occur, the other company will be
required to assume our responsibilities on the debt and, in a merger or
consolidation where we are not the surviving corporation, we will have no
further liabilities or obligations with respect to the debt securities.
- Upon our request to change an obligation created by the indenture, the
holders of a majority of the total principal amount of the debt
outstanding in any series may vote to change our obligations or your
rights concerning the debt in that series. We may also amend or
supplement the indenture for certain purposes without the consent of any
holder of debt securities. However, to change any term relating to the
payment of principal or interest for a series of debt securities, every
holder in the affected series must consent.
- Under certain conditions, we may discharge the indenture at any time by
depositing sufficient funds with the trustee to pay the obligations when
due. All amounts due to you on the debt would be paid by the trustee from
the deposited funds.
The following are events of default under the indenture:
- Our failure to pay interest for 30 days.
- Our failure to pay principal and any premium when due.
- Our failure to make any sinking fund payment when due.
- Our failure to perform covenants for 60 days after receipt of notice to
cure.
- Our failure to pay our debt under any mortgage or indenture of at least
$20,000,000 when due and payable other than as a result of acceleration,
or which becomes due upon acceleration which is not rescinded or such
debt discharged, each within 30 days after written notice to us.
- Certain events in bankruptcy, insolvency or reorganization.
- Any other events of default relating to a specific series of debt
securities and set forth in the prospectus supplement for those debt
securities.
If there is an event of default, the trustee of holders of at least 25% of
the principal amount outstanding of a series may declare the principal
immediately payable for that series. However, holders of a majority in principal
amount of that series may cancel this declaration.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports with the Securities and
Exchange Commission (the "SEC"). You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-732-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
on the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information that we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus and supplements to this prospectus. We
incorporate by reference our Annual Report on Form 10-K for the fiscal year
ended December 31, 1999. The information filed by us with the SEC in the future
will update and supercede this information.
We also incorporate by reference any future filings we may make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") until our offering is completed.
You may request a copy of these filings, at no cost, by writing or calling
us at the following address or telephone number:
Alan H. Lund
Executive Vice President, Co-Chief Operating
Officer and Chief Financial Officer
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Telephone: 310-788-1999
THE COMPANY
We acquire new and used commercial jet aircraft for the purpose of leasing
and selling such aircraft to domestic and foreign airlines. In terms of the
number and value of transactions completed, we are a major owner-lessor of
commercial jet aircraft. In addition, we resell commercial jet aircraft for our
own account, for the account of airlines and for the account of financial
institutions. At December 31, 1999, we had committed to purchase 331 aircraft
deliverable through 2007 at an estimated aggregate purchase price of $16.4
billion.
We are an indirect wholly owned subsidiary of American International Group,
Inc. ("AIG").
We are incorporated in the State of California. We maintain our principal
executive offices at 1999 Avenue of the Stars, 39th Floor, Los Angeles,
California 90067. Our telephone number is (310) 788-1999 and our telecopier
number is (310) 788-1990.
5
<PAGE> 10
AMERICAN INTERNATIONAL GROUP, INC.
AIG is a holding company which through its subsidiaries is primarily
engaged in a broad range of insurance and insurance-related activities and
financial services in the United States and abroad. AIG's primary activities
include both general and life insurance operations. Their principal insurance
company subsidiaries are American Home Assurance Company, National Union Fire
Insurance Company of Pittsburgh, Pa., New Hampshire Insurance Company, Lexington
Insurance Company, American International Underwriters Overseas, Ltd., American
Life Insurance Company, American International Assurance Company, Limited, The
Philippine American Life and General Insurance Company, American International
Reinsurance Company, Ltd. and United Guaranty Residential Insurance Company. The
Common Stock of AIG is listed on the New York Stock Exchange, among others.
AIG IS NOT A CO-OBLIGOR OR A GUARANTOR FOR THE DEBT SECURITIES.
USE OF PROCEEDS
We will use proceeds that we receive from the sale of the debt securities,
together with internally generated funds, for general corporate purposes unless
the prospectus supplement states otherwise. General corporate purposes will
include our purchases of aircraft. We will invest any proceeds from the sale of
the debt securities not immediately used in marketable securities until spent.
PROSPECTUS SUPPLEMENT
The prospectus supplement provides the specific terms of the debt
securities and may differ from the general information provided in this
prospectus. You should rely on the prospectus supplement if the information we
provide in it is different from the information contained in this prospectus.
DESCRIPTION OF DEBT SECURITIES
We may offer unsecured and unsubordinated debt securities (the "Debt
Securities") under an indenture dated as of November 1, 1991 (the "Indenture"),
between us and U.S. Bank Trust National Association (successor to Continental
Bank, National Association), as trustee (the "Trustee"). The following is a
summary of certain provisions of the Debt Securities and of the Indenture and
does not contain all of the information which may be important to you. You
should read all provisions of the Indenture carefully, including the definitions
of certain terms, before you decide to invest in the Debt Securities. If we
refer to particular sections or defined terms of the Indenture, we mean to
incorporate by reference those sections or defined terms of the Indenture. A
copy of the Indenture is incorporated by reference as an Exhibit to this
Registration Statement. See "Where You Can Find More Information."
GENERAL
The Debt Securities will rank equally with our other unsecured and
unsubordinated indebtedness. The Indenture does not limit the amount of Debt
Securities that we may issue. We may issue Debt Securities in one or more
series, with the same or various maturities, at par, or with original issue
discount. The prospectus supplement will describe
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any Federal income tax consequences and other special considerations applicable
to any Debt Securities issued with original issue discount.
The prospectus supplement will set forth the initial offering price, the
aggregate principal amount and the following terms of the Debt Securities:
(1) the title;
(2) any limit on the aggregate principal amount of a particular series;
(3) to whom interest on the Debt Securities should be paid if other than
the registered owner;
(4) the date or dates on which we agree to pay principal;
(5) the rate or rates of interest for the Debt Securities (which may be
fixed or variable) and, if applicable, the method used to determine the
rate or rates of interest, the date or dates from which interest will
accrue, the dates that interest shall be payable and the record date
for the payment of the interest;
(6) the place or places where principal and interest will be payable, or
the method of such payment;
(7) the period or periods within which, the price or prices at which, and
the terms and conditions upon which the Debt Securities may be
redeemed, in whole or in part, at our option;
(8) any mandatory or optional sinking fund or analogous provisions and our
obligation, if any, to redeem or repurchase the Debt Securities
pursuant to any sinking fund or similar provisions or at the option of
a holder thereof, and the period, price and terms and conditions for
the redemption or repurchase;
(9) the currency or currencies in which we agree to make payments on Debt
Securities;
(10) the method of determining amounts of principal, any premium and
interest payable on the Debt Securities if these amounts are
calculated in reference to an index;
(11) the amount of principal that we will pay upon acceleration, if other
than the entire principal amount;
(12) whether we will issue the debt securities in certificates or
book-entry form (see "Certificated Securities" and "Global Securities"
below);
(13) any additional Events of Default, if any; and
(14) any additional terms.
PAYMENT OF INTEREST AND EXCHANGE
We will issue the Debt Securities of each series either in the form of one
or more global securities (a "Global Security") registered in the name of Cede &
Co. as the nominee of The Depository Trust Company (the "Depositary"), or as a
certificate issued in definitive registered form (a "Certificated Security"), as
set forth in the prospectus supplement. If we do not state the form of a series
of Debt Securities in a prospectus
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supplement, we are issuing the series as a Global Security. Principal, premium,
if any, and interest, if any, is to be paid to registered holders at the office
of the Trustee in the Borough of Manhattan City and State of New York or at any
paying agency maintained by the Company for that purpose as described under
"Global Securities" below. We may provide at our option for payment of interest
to registered holders of Certificated Securities by check mailed to the address
of the holder as it appears on the register for the Certificated Securities.
CERTIFICATED SECURITIES
A holder may present Certificated Securities for transfer or exchange at
the Trustee's office or paying agencies in accordance with the terms of the
Indenture unless the prospectus supplement states otherwise. There will not be a
service charge for any transfer or exchange of Certificated Securities, but the
transfer or exchange is subject to other limitations set forth in the Indenture.
GLOBAL SECURITIES
Unless we tell you otherwise in a prospectus supplement, we will register
each Global Security representing Debt Securities in the name of Cede & Co., as
nominee of the Depositary. Cede & Co. may not transfer any Global Security, in
whole or in part, to anyone except the Depositary or a nominee of the Depositary
unless it is exchanged first for a Certificated Security.
The information under the headings "The Depositary," "Book-Entry System"
and "Year 2000" in this section concerning the Depositary and the Depositary's
book-entry system has been obtained from sources we believe to be reliable, but
we take no responsibility for the accuracy thereof.
The Depositary
The Depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered under the provisions of Section 17A of the Exchange Act. The
Depositary holds securities deposited by persons that have accounts with the
Depositary ("Direct Participants"). The Depositary also facilitates the
settlement among Direct Participants and Indirect Participants (as defined
below), of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Direct
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates.
The Depositary is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Indirect Participants in the
Depositary's book-entry system include securities brokers and dealers, banks and
trust companies. Indirect Participants access the Depositary's system by
clearing through or maintaining custodial relationships with a Direct
Participant. The rules applicable to the Depositary and its Participants are on
file with the SEC.
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The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form (certificated
securities). Such laws may impair the ability to transfer beneficial interests
in Debt Securities represented by Global Securities.
Book-Entry System
We anticipate that the following provisions will apply to all depositary
arrangements unless the prospectus supplement states otherwise.
Ownership of beneficial interests in Securities will be limited to Direct
Participants or persons that may hold interest through Direct Participants such
as securities brokers and dealers, banks and trust companies ("Indirect
Participants").
Upon the issuance of a Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Debt Securities represented by such Global Security to the accounts of the
applicable Direct Participants. The accounts to be credited shall be designated
by any underwriters or agents participating in the distribution of such Debt
Securities. Purchases of Debt Securities under the Depositary's system must be
made by or through Direct Participants, which will receive a credit for the Debt
Securities on the Depositary's records. The ownership interest of each actual
purchaser of Debt Securities (a "Beneficial Owner") will be recorded on the
Direct Participants' and Indirect Participants' records. Beneficial Owners will
not receive written confirmation from the Depositary of their purchase, but
Beneficial Owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the Direct Participant or Indirect Participant through which the Beneficial
Owner entered into the transaction. Transfers of ownership interests in the Debt
Securities are expected to be effected by entries made on the books of
Participants acting on behalf of Beneficial Owners. So long as the Depositary or
its nominee is the registered owner of a Global Security, they will be
considered the sole owner or holder of the Debt Securities represented by such
Global Security for all purposes under the Indenture. Beneficial Owners will not
be entitled to have the Debt Securities represented by a Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities in definitive form and will not be considered the
owners or holders thereof under the Indenture.
We will make payments of principal, premium, if any, and interest on
Book-Entry Securities to the Depositary or its nominee, as the case may be, as
the registered owner of the Global Security. Neither we, nor the Trustee or any
of our agents will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in such Global Security, or with respect to maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.
We expect that the Depositary, upon receipt of any principal, premium or
interest payment, will immediately credit Direct Participants' accounts with
payments in amounts proportionate to the respective beneficial interests in the
Global Security, as shown on the records of the Depositary. We also expect that
payments by Direct Participants to Indirect Participants and by Direct
Participant and Indirect Participants to Beneficial Owners will be governed by
standing instructions and customary practices, and accordingly will be the
responsibility of the Participants.
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As long as the Debt Securities are held by the Depositary or its nominee
and the Depositary continues to make its same day funds settlement system
available to us, all payments of principal and interest on the Debt Securities
will be made in immediately available funds. We are advised that the
Depositary's practice is to credit Direct Participants' accounts on the
applicable payment date unless the Depositary has reason to believe that it will
not receive payment on such date.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing house or next-day funds. However, we expect that
the Debt Securities will trade in the Depositary's Same-Day Funds Settlement
system. Accordingly, the Depositary will require that secondary trading activity
in the Debt Securities settle in immediately available funds. We do not make any
assurances as to any possible effect the requirement for settlement in
immediately available funds could have on trading activity in the Debt
Securities.
We expect that the forwarding of notices and other communications by the
Depositary to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among themselves, subject to any
statutory or regulatory requirements which may be in effect. Neither the
Depositary nor Cede & Co. will consent or vote with respect to the Debt
Securities. We are advised that the Depositary's usual procedure is to mail an
omnibus proxy to us as soon as possible after the record date with respect to
any such consent or vote. The omnibus proxy would assign Cede & Co.'s consenting
or voting rights to the Direct Participants to whose accounts the Debt
Securities are credited on the applicable record date (which would be identified
in a listing attached to the omnibus proxy).
In the event the Depositary is unwilling or unable to continue as
Depositary for a series of Debt Securities and we do not appoint a successor
Depositary within 90 days, we will issue such Debt Securities in certificated
form in exchange for such Global Security.
We may decide at any time not to have Debt Securities of a particular
series represented by one or more Global Securities and, accordingly will issue
Debt Securities representing such series in certificated form in exchange for
all of the Global Security or Securities representing such Debt Securities.
Year 2000
The Depositary has informed us that its management is aware that some
computer applications, systems and the like for processing data ("Systems") that
are dependent upon calendar dates, including dates before, on and after January
1, 2000, may encounter "Year 2000 problems." The Depositary has informed its
Participants and other members of the financial community (the "Industry") that
it has developed and is implementing a program so that its Systems, as the same
relate to the timely payment of distributions (including principal and interest
payments) to security holders, book-entry deliveries, and settlement of trades
within the Depositary, continue to function appropriately. This program includes
a technical assessment and an remediation plan, each of which is complete.
Additionally, the Depositary's plan includes a testing phase, which is expected
to be completed within appropriate time frames.
However, the Depositary's ability to perform properly its services is also
dependent upon other parties, including but not limited to issuers and their
agents, as well as third-
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party vendors from whom the Depositary licenses software and hardware, and
third-party vendors on whom the Depositary relies for information or the
provision of services, including telecommunication and electrical utility
service providers, among others. The Depositary has informed the Industry that
it is contacting (and will continue to contact) third-party vendors from whom
the Depositary acquires services to: (i) impress upon them the importance of
such services being Year 2000 compliant; and (ii) determine the extent of their
efforts for Year 2000 remediation (and, as appropriate, testing) of their
services. In addition, the Depositary is in the process of developing such
contingency plans as it deems appropriate.
According to the Depositary, the foregoing information with respect to the
Depositary has been provided to the industry for informational purposes only and
is not intended to serve as a representation, warranty or contract modification
of any kind. Detailed information concerning the Depositary's progress,
including a series of periodic reports, can be accessed electronically by means
of its home page on the internet (http://www.dtc.org).
CERTAIN COVENANTS OF THE COMPANY
Restrictions on Liens. We will not, and will not permit any Restricted
Subsidiary to, issue, assume or guarantee any indebtedness for borrowed money
secured by any Mortgage (as defined in "Certain Definitions"), upon any property
of ours or any Restricted Subsidiary (as defined in "Certain Definitions"), or
on any shares of stock of any Restricted Subsidiary, without ensuring that the
Debt Securities (together with any other indebtedness of ours or such Restricted
Subsidiary ranking equally with the Debt Securities if we so determine) is
equally and ratably secured. The foregoing restrictions do not apply to:
(1) mortgages existing on November 1, 1991;
(2) certain mortgages securing all or a part of the purchase price of
property (other than property acquired for lease to another person);
(3) mortgages on the property of a Restricted Subsidiary existing at the
time it became a Restricted Subsidiary;
(4) mortgages securing indebtedness for borrowed money owed by a Restricted
Subsidiary to us or another Restricted Subsidiary;
(5) mortgages on property of another corporation that are in existence at
the time we or a Restricted Subsidiary acquire the property of that
corporation as an entirety or substantially as an entirety (including
acquisition by merger or consolidation);
(6) any replacement of any of the foregoing, provided that the principal
amount of the indebtedness for borrowed money secured by the mortgage
shall not be increased and the principal repayment schedule and
maturity of such indebtedness is not extended and is limited to the
same property subject to the mortgage replaced or property substituted
therefor, as a result of any destruction, condemnation or damage of
such property;
(7) liens in connection with certain legal proceedings;
(8) liens for certain taxes or assessments, landlord's liens and charges
incidental to the conduct of our business or the ownership of property
and assets by ourselves
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or a Restricted Subsidiary, which liens are not incurred in connection
with the borrowing of money and do not, in our opinion, materially
impair the use of such property in our business operations or the
business operations of a Restricted Subsidiary or the value to the
business of such property; and
(9) mortgages not otherwise excepted above which, when aggregated with all
other outstanding indebtedness for borrowed money of ours and of
Restricted Subsidiaries secured by mortgages and not listed in clauses
(1) through (8) above, does not exceed 12.5% of our Consolidated Net
Tangible Assets (as defined in "Certain Definitions").
Restrictions as to Dividends and Certain Other Payments. We may not pay or
declare any dividend or make any distributions on any of our capital stock
(except in shares of, or warrants or rights to subscribe for or purchase shares
of our capital stock), or make any payment ourselves or through any Restricted
Subsidiary to acquire or retire shares of such stock, at a time when an Event of
Default has occurred and is continuing under the Indenture because:
(1) we have failed to pay interest on the Debt Securities of that series
when due and continue not to pay for 30 days;
(2) we have failed to pay the principal and premium, if any, on the Debt
Securities of that series when due either at maturity, when due upon
redemption, or when due by declaration or otherwise; or
(3) we have failed to deposit any sinking fund payment with respect to Debt
Securities of that series when and as due.
Restrictions on Investments in Non-Restricted Subsidiaries. We will not,
nor will we permit any Restricted Subsidiary, to invest in or transfer assets to
a Non-Restricted Subsidiary if immediately thereafter we would be in breach of
or in default in the performance of any of our covenants or warranties contained
in the Indenture.
Limited Covenants in the Event of a Highly Leveraged Transaction. Other
than our covenants included in the Indenture described above and as described
below in "Merger and Sale of Assets," there are no covenants or provisions in
the Indenture that afford holders protection should we participate in a highly
leveraged transaction, leveraged buyout, reorganization, restructuring, merger
or similar transaction.
CERTAIN DEFINITIONS
Certain significant terms which are defined in the Indenture are set forth
below:
"Consolidated Net Tangible Assets" means the total amount of assets (less
depreciation and valuation reserves and other reserves and items deductible from
the gross book value of specific asset accounts under generally accepted
accounting principles) which under generally accepted accounting principles
would be included on a balance sheet for us together with our Restricted
Subsidiaries, after deducting:
(1) all liability items except indebtedness (whether incurred, assumed or
guaranteed) for borrowed money maturing by its terms more than one year
from the date of creation thereof or which is extendible or renewable
at the sole option of the obligor in a manner where it could become
payable more than one year from the date of creation thereof,
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(2) deducting shareholder's equity and reserves for deferred income taxes,
(3) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, which in each case,
would be included on such balance sheet, and
(4) investments and equity in the net assets of Non-Restricted
Subsidiaries.
"Mortgages" means any mortgage, pledge, lien or other encumbrance of any
nature upon any property of ours or any Restricted Subsidiary.
"Non-Restricted Subsidiaries" means (1) any Subsidiary designated as
non-restricted by the Board of Directors of the Company in accordance with the
Indenture, and (2) any other Subsidiary of which one or more Non-Restricted
Subsidiaries owns, directly or indirectly, the majority of the voting stock, if
a corporation; or, if a limited partnership, in which the Non-Restricted
Subsidiary is a general partner.
"Restricted Subsidiaries" means all Subsidiaries other than Non-Restricted
Subsidiaries. Our Board of Directors may change the designations of Restricted
Subsidiaries and Non-Restricted Subsidiaries, subject to specified conditions in
the Indenture.
"Subsidiary" means any corporation, partnership, or trust of which we or a
Subsidiary own, or we together with one or more Subsidiary own, directly or
indirectly, more than 50% of the Voting Stock.
MERGER AND SALE OF ASSETS
We may consolidate with or merge into any other Person or convey, transfer
or lease our properties and assets substantially as an entirety to any Person,
and another Person may consolidate or merge with us or convey, transfer or lease
its properties and assets to us substantially as an entirety on the following
conditions:
(1) the entity formed by consolidation or merger or to which such assets or
properties are conveyed, transferred or leased, is a corporation,
partnership or trust organized and validly existing under the laws of
the United States, any State or the District of Columbia and such
Person expressly assumes our obligations under the Indenture;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, has happened and is continuing; and
(3) if our property or assets become subject to a mortgage, pledge, lien,
security interest or other encumbrance not permitted by the Indenture,
each of ourselves and such entity have taken appropriate steps to
secure any of the Debt Securities equally and ratably with the
securities secured thereby.
Upon such consolidation, merger or conveyance, transfer or lease, the
successor entity shall be substituted for us under the Indenture and, except in
the case of such a lease, we will be relieved of all obligations under the
Indenture.
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AMENDMENT, SUPPLEMENT AND WAIVER OF THE INDENTURE
We, together with the Trustee, may amend or supplement the Indenture with
the consent of the holders of a majority in principal amount of the outstanding
Debt Securities of each series affected by such amendment or supplement. Any
past default by ourselves and its consequences may be waived with the consent of
the holders of a majority in principal amount of the outstanding Debt Securities
of each series affected by such default. However, we may not enter into any
amendment, supplement or waiver without the consent of the holders of all
affected Debt Securities if the amendment, supplement or waiver would:
(1) cause a change in the stated maturity of principal or any installment
of principal or interest on any Debt Security;
(2) reduce the principal amount payable or the rate of interest thereon or
any premium payable upon the redemption of the Debt Security;
(3) change the stated maturity of any Debt Security (or reduce the amount
payable upon a declaration of acceleration);
(4) change the time for payment of any interest on any Debt Security;
(5) make any Debt Security payable in a currency other than that stated in
the Debt Security; or
(6) reduce the stated percentage of principal amount of Debt Securities
whose holders must consent to such amendment, supplement or waiver.
We, together with the Trustee, may, without the consent of any holder of
Debt Securities, amend or supplement the Indenture for purposes including:
(1) to evidence our succession by another corporation;
(2) to add covenants or additional Events of Default for the benefit of the
holders of all or any series of Debt Securities;
(3) to cure any ambiguity;
(4) to correct any provision of the Indenture inconsistent with other
provisions or make any other provision which does not adversely
materially affect the interests of the holders of Debt Securities; or
(5) to change or eliminate any provision of the Indenture if such change or
elimination is effective only when there are no Debt Securities
outstanding issued prior to such change or elimination and entitled to
the benefit of such provision.
EVENTS OF DEFAULT
The Indenture defines an Event of Default as being any one of the following
occurrences:
(1) our failure to pay interest on the Debt Securities of that series when
due and the continuation of our failure to pay for 30 days;
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(2) our failure to pay the principal and premium, if any, on the Debt
Securities of that series when due at maturity, when due upon
redemption, or when due by declaration or otherwise;
(3) our failure to deposit of any sinking fund payment for that series of
Debt Securities when and as due;
(4) our default in the performance of any other covenant contained in the
Indenture (except as to covenants included in the Indenture not for the
benefit of that particular series of Debt Securities) continued for 60
days after written notice;
(5) our default under any mortgage, indenture (including the Indenture) or
instrument under which indebtedness for borrowed money is issued or is
secured or evidenced, which default constitutes a failure to pay
principal of such indebtedness in an amount exceeding $20,000,000 when
due and payable (other than as a result of acceleration) or results in
indebtedness for borrowed money in the aggregate of $20,000,000 or more
becoming or being declared due and payable before its terms, and such
acceleration is not rescinded or annulled, or such indebtedness for
borrowed money is not discharged within 30 days after written notice to
us by the Trustee, or notice to each of ourselves and the Trustee by
the holders of at least 25% in principal amount of the outstanding Debt
Securities of that series;
(6) certain events in bankruptcy, insolvency or reorganization; or
(7) any other events of default provided with respect to the Debt
Securities.
If an Event of Default occurs and is continuing, the Trustee or the holders
of at least 25% in principal amount of the Debt Securities of each affected
series may declare the Debt Securities of that series to be due and payable
immediately, but under certain conditions such acceleration may be rescinded by
the holders of a majority in principal amount of the Debt Securities of each
affected series.
The holder of any Debt Security of a series will not have any right to
institute any proceeding with respect to the Indenture or remedies thereunder,
unless
(1) the holder previously gives the Trustee written notice of an Event of
Default,
(2) the holders of not less than 25% in principal amount of the outstanding
Debt Securities of that series shall have also made such written
request to the Trustee and offered the Trustee satisfactory indemnity
to institute such proceeding as Trustee, and
(3) the Trustee for 60 days shall have failed to institute such proceeding.
However, the right of any holder of any Debt Security to institute suit for
enforcement of any payment of principal, premium, if any, and interest on such
Debt Security on or after the applicable due date, may not be impaired or
affected without such holder's consent.
The holders of a majority in principal amount of outstanding Debt
Securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or for exercising any trust
or power conferred on the Trustee with respect to Debt Securities of that
series. However, the Trustee may refuse to follow any direction that conflicts
with any rule of law or the Indenture. Before proceeding to exercise any right
or power under the Indenture at the direction of such holders, the Trustee shall
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be entitled to receive reasonable security or indemnity from such Holders
against the costs, expenses and liabilities which could be incurred in
compliance with any such direction. The Trustee may withhold from holders of
Debt Securities notice of any continuing default (except a default in payment of
principal, premium, if any, or interest), if it determines that withholding
notice is in their interests.
We are required to furnish to the Trustee within 120 days after the end of
each fiscal year a statement as to whether any default under the Indenture
occurred during the fiscal year.
DEFEASANCE AND COVENANT DEFEASANCE
We may discharge our obligations (a "defeasance") with respect to the
outstanding Debt Securities of a series of Debt Securities other than with
respect to certain obligations to the Trustee and our obligations with respect
to: (1) the registration, transfer and exchange of certificated Debt Securities,
(2) mutilated, destroyed, lost or stolen certificated Debt Securities, and (3)
the maintenance of an office or agency in the place of payment and the treatment
of funds held by paying agents. We may also be released from the restrictions
described under "Certain Covenants of the Company" above and any other
provisions identified in the prospectus supplement ("covenant defeasance") under
certain conditions. The conditions which we must satisfy for defeasance or
covenant defeasance include those set forth below:
(A) we will have irrevocably deposited or caused to be deposited with the
Trustee (or other satisfactory trustee), trust funds for the payment of
such Debt Securities, consisting of money, U.S. Government Obligations
(as defined below) which in accordance with the scheduled payment of
principal and interest thereon will provide money, or a combination of
money and U.S. Government Obligations, which will be in an amount
sufficient without reinvestment to pay and discharge at maturity or
redemption the entire amount of principal of (and premium, if any) and
interest on such Debt Securities;
(B) no Event of Default or event which with notice or lapse of time or both
would become an Event of Default with respect to such Debt Securities
has occurred and is continuing on the date of such deposit and, for
certain purposes, has not occurred during the period ending on the
123rd day after the date of deposit, or any longer preference period;
(C) the defeasance or covenant defeasance shall not cause the Trustee to
have a conflicting interest as referred to in the Indenture; and
(D) the defeasance or covenant defeasance will not result in a breach or
violation of the Indenture or other material agreements or instruments
or cause the Debt Securities, if listed on a national securities
exchange, to be delisted.
In the case of defeasance, we are also required to deliver to the Trustee
an opinion of counsel stating that we have received a direct ruling from the
Internal Revenue Service, or such a ruling has been published, or since the date
of the Indenture there has been a change in the applicable Federal income tax
law, such that the holders of the outstanding Debt Securities of the series to
be defeased will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance. The ruling will provide that the
holders of the outstanding Debt Securities to be defeased will be subject to
Federal
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income tax on the same amounts, in the same manner, and at the same times as
would have been the case if such defeasance had not occurred.
In the case of a covenant defeasance, we are required to deliver to the
Trustee an opinion of counsel to the effect that the Holders of the outstanding
Debt Securities of the series for which covenant defeasance is proposed will not
recognize income, gain or loss for Federal income tax purposes as a result of
such covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
the covenant defeasance had not occurred.
"U.S. Government Obligations" is defined in the Indenture as securities
that are (a) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged, or (b) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America, the payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America. In either
case, such U.S. Governmental Obligations are not callable or redeemable at the
option of the issuer thereof, and shall also include a Depositary receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as
amended (the "Securities Act")) as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such Depositary receipt.
THE TRUSTEE
The Trustee has functioned as an unsecured lender to us from time to time.
In addition, we may maintain deposit accounts and conduct other banking
transactions with the Trustee in the ordinary course of business.
PLAN OF DISTRIBUTION
We may sell the Debt Securities either: (1) through underwriters or
dealers; (2) directly to one or more purchasers; or (3) through agents.
If underwriters or dealers are used in the sale, the underwriters or
dealers will acquire the Debt Securities for their own account and may later
resell the Debt Securities. Resale transactions for the Debt Securities may
include negotiated transactions, the resale at a fixed public offering price or
resale at varying prices determined at the time of sale. The Debt Securities may
be offered to the public through underwriting syndicates which may be
represented by managing underwriters. Such underwriting firms may purchase and
sell the Debt Securities in the secondary market, but they are not obligated to
do so. There are no assurances that there will be a secondary market for the
Debt Securities. The obligations of the underwriters to purchase the Debt
Securities will be subject to certain conditions. The underwriters will be
obligated to purchase all the Debt Securities of a series if any are purchased.
Any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
We may also sell the Debt Securities directly or through agents designated
by us. We will name any agent involved in the offer or sale of the Debt
Securities and state any commissions paid by us to that agent in the prospectus
supplement. We will set forth in the prospectus supplement the net proceeds we
will receive from the sale of the Debt Securities. Unless indicated in the
prospectus supplement, any agent is acting on a best
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efforts basis for the period of its appointment. Any agent will also be deemed
to be an underwriter as that term is defined in the Securities Act.
We may authorize agents, underwriters or dealers to solicit offers by
certain institutional investors to purchase Debt Securities at the public
offering price provided in the prospectus supplement and provide for payment and
delivery on a future date specified in the prospectus supplement. Contracts for
those delayed purchases will be subject only to the conditions contained in the
prospectus supplement and the prospectus supplement will set forth the
commission to be paid for solicitation of those contracts.
We may indemnify any underwriters, dealers and agents who participate in
the distribution of the Debt Securities against certain civil liabilities,
including liabilities under the Securities Act. We also may agree to make
contributions with respect to payments which the agents or underwriters may be
required to make. Those underwriters, dealers and agents may be customers of,
engage in transactions with, or perform services for us in the ordinary course
of business.
EXPERTS
Our consolidated financial statements and schedule as of and for the three
years ended December 31, 1999, which are incorporated by reference in this
prospectus from our Annual Report on Form 10-K, have been incorporated in
reliance on the audited report of PricewaterhouseCoopers LLP, independent
auditors, given on the authority of said firm as experts in auditing and
accounting.
LEGAL MATTERS
The validity of the issuance of the Debt Securities we are offering will be
passed upon for us by O'Melveny & Myers LLP. Morgan, Lewis & Bockius LLP, Los
Angeles, California will pass upon certain legal matters for the underwriters or
agents.
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$150,000,000
(ILFC LOGO)
INTERNATIONAL LEASE
FINANCE CORPORATION
6 3/4% NOTES DUE OCTOBER 1, 2002
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PROSPECTUS SUPPLEMENT
September 20, 2000
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LEHMAN BROTHERS
LOGO
