EX-99.A 2 ex99.txt EXHIBIT A AIRPLANES PASS THROUGH TRUST I. Transaction Overview MORGAN STANLEY DEAN WITTER LEHMAN BROTHERS Offered Certificates (assuming an amortizing structure)* Subclass A-9 Certificates ------------------------- Aggregate Initial Principal Amount $750,000,000 Expected Ratings Fitch AA Moody's Aa2 Standard & Poor's AA Interest Rate LIBOR + o% Initial Loan to Value (1) 57.7% Initial Loan to Assumed First Year's Net Revenue (2) 4.71x Assumed Interest Coverage Ratio (3) 3.64x Assumed Debt Service Coverage Ratio (4) 3.64x Assumed Adjusted Debt Service Coverage Ratio (5) 1.60x Expected Final Payment Date (6) November 15, 2008 Expected Weighted Average Life (Years) 5.1 Expected Principal Amortization Period January 15, 2004 to November 15, 2008 Final Maturity Date March 15, 2019
-------------------------------------------------------------------------------- * The ratios in this table are calculated as of March 15, 2001 and in each case exclude $40 million of class A Principal Adjustment Amount which will be paid out of the miscellaneous reserve amount on April 17, 2001 (1) "Initial Loan to Value" represents (i) the aggregate principal amount of the class A certificates divided by (ii) the aggregate appraised value of the aircraft as of January 31, 2001, plus $80 million, the expected amount of the liquidity reserve amount, net of security deposits, on the closing date. (2) "Assumed First Year's Net Revenue" means gross revenue less leasing costs, servicer fees, administrative agent fees, cash manager fees and other general and administrative costs (3) "Assumed Interest Coverage Ratio" means Assumed First Year's Net Revenue divided by Assumed First Year's Interest. "Assumed First Year's Interest" means the interest payable on the subclass A-9 certificates and each other subclass of class A certificates then outstanding (4) "Assumed Debt Service Coverage Ratio" means Assumed First Year's Net Revenue divided by Assumed First Year's Interest and Minimum Principal. "Assumed First Year's Interest and Minimum Principal" means (a) the interest and minimum principal payments on the subclass A-9 certificates plus (b) the interest and minimum principal payments assumed to be payable on each other subclass of class A certificates currently outstanding (5) "Assumed Adjusted Debt Service Coverage Ratio" means Assumed First Year's Net Revenue divided by Assumed First Year's Interest, Minimum Principal and Class A Principal Adjustment Amount. "Assumed First Year's Interest, Minimum Principal and Class A Principal Adjustment Amount" means (a) the interest, minimum principal payments and principal adjustment amounts on the subclass A-9 certificates plus (b) the interest, minimum principal payments and principal adjustment amounts assumed to be payable on each other subclass of class A certificates currently outstanding. (6) "Expected Final Payment Date" with respect to the subclass A-9 certificates means the date by which all the principal on the subclass A-9 certificates will be paid based on the Base Case Use of Proceeds The net cash proceeds from this offering of $750 million will be used to refinance the existing subclass A-4 and A-7 certificates. Existing Certificates Outstanding Ratings Annual Interest Class or Subclass of Principal Amount (Moody's/S&P/ Rate (payable Assumed Final Final Certificates and Notes (as of 15-Feb-01) Fitch) monthly) Payment Date (1) Maturity Date ---------------------- ----------------- ------ -------- ---------------- ------------- ($ millions) Subclass A-4 200.0 Aa2/AA/AA LIBOR+0.620% Mar 15, 2001 Mar 15, 2019 Subclass A-6 450.4 Aa2/AA/AA LIBOR+0.340% Jan 15, 2004 Mar 15, 2019 Subclass A-7 550.0 Aa2/AA/AA LIBOR+0.260% Mar 15, 2001 Mar 15, 2019 Subclass A-8 700.0 Aa2/AA/AA LIBOR+0.375% Mar 15, 2003 Mar 15, 2019 Class B 279.4 A2/A/A LIBOR+0.750% Dec 15, 2016 Mar 15, 2019 Class C 349.8 Baa2/BBB/BBB 8.150% Nov 15, 2013 Mar 15, 2019 Class D 395.1 Ba2/BB/BB 10.875% Dec 15, 2016 Mar 15, 2019 Class E (notes only) (2) 591.2 -- 20.000% (3) -- Mar 15, 2019
(1) Assumed Final Payment Dates were determined based on the assumptions described under "Airplanes Group Performance Assumptions" in the preliminary Offering Memorandum (2) Held by General Electric Capital Corporation (3) The annual interest rate on the class E notes is adjusted by reference to changes in the U.S. Consumer Price Index since March 28, 1996. As of February 15, 2001, the annual interest rate on the class E notes was 22.24%. Except for the class E minimum interest amount and supplemental interest amount, payable at 1% and 10% per annum, respectively, no principal or interest is payable on the class E notes until the more senior classes of notes have been paid in full 2 Aircraft Summary Original Transaction 1998 Refinancing 2001 Refinancing March 1996 (1) March 1998 (2) January 31, 2001 (3) -------------- -------------- -------------------- Number of Aircraft 229 218 193 Narrowbody Models (% of Appraised Value) A320-200 8.82 9.67 10.41 B727-200A 0.24 0.21 0.23 B737-200A 4.34 4.46 3.37 B737-200C 0.42 0.44 -- B737-300 5.92 6.41 6.21 B737-400 13.90 15.41 16.82 B737-500 5.85 6.14 6.97 B757-200 3.07 3.32 3.53 DC9-14 0.05 0.05 -- DC9-15 0.15 0.14 -- DC9-32 0.86 0.78 0.71 DC9-51 0.50 0.49 0.43 F-100 7.37 6.77 6.15 MD-82 0.94 0.95 1.06 MD-83 12.36 12.99 13.82 MD-87 0.40 0.39 0.39 ---- ---- ---- Subtotal 65.19 68.62 70.09 Widebody Models A300-114-100 0.64 0.45 - A300-134-200 0.79 0.65 0.57 A300-C4-203 0.45 0.42 0.47 B747-20OBC (4) 0.85 0.98 - B767-200ER 1.32 1.38 1.37 B767-300ER 6.29 6.78 7.23 DC 10-30 1.00 -- - MD-11 5.86 6.23 5.94 ---- ---- ---- Subtotal 17.20 16.89 15.57 Freighter Models B747-200SF -- -- 0.96 DC8-71 F 11.21 8.71 7.64 DC8-73CF 0.51 0.52 0.54 DC 10-30F 0.96 -- -- Subtotal 12.68 9.23 9.14 Turboprop Models ATR42-300 0.65 0.65 0.68 DHC8-100 0.90 0.94 0.98 DHC8-300 3.26 3.55 3.45 METRO-III 0.12 0.12 0.09 ---- ---- ---- Subtotal 4.93 5.26 5.20
(1) Using appraised values as of October 31, 1995 (aggregate value of $4,527 million) (2) Using appraised values as of January 23, 1998 (aggregate value of $3,813 million) (3) Using appraised values as of January 31, 2001 (aggregate value of $3,135 million) (4) This aircraft completed its conversion to a freighter, B747-20OSF, on March 27, 1998 3 AIRPLANES PASS THROUGH TRUST I. Transaction Overview (continued) Lessee Summary By Percent of Total Appraised Value (%) ---------------------------------------------------------------------------------- Original Transaction 1998 Refinancing 2001 Refinancing March 1996 (1) March 1998 (2) January 31, 2001 (3) -------------- ----------------- -------------------- Number of Lessees 83 74 66 Number of Countries 40 38 35 Europe (excluding CIS) 34.4% 33.6% 33.7% Latin America 28.4% 33.7% 29.9% North America 17.3% 17.2% 22.0% Asia & Far East 15.0% 10.3% 10.0% Africa 0.7% 1.5% 1.3% Other (including CIS) 1.1% 0.5% 0.5% Australia & New Zealand 0.3% 0.3% 0.3% Off-lease 2.8% 2.9% 2.3% Noise Restrictions By Percent of Total Appraised Value (%) --------------------------------------------------------------------------------- Original Transaction 1998 Refinancing 2001 Refinancing March 1996 (1) March 1998 (2) January 31, 2001 (3) -------------- ----------------- -------------------- Stage 3 93.4% 93.4% 94.2% Stage 3 Hush-kitted 0.0% 0.0% 0.8% Stage 2 6.6% 6.6% 5.0%
---------- (1) Using appraised values as of October 31, 1995 (2) Using appraised values as of January 23, 1998 (3) Using appraised values as of January 31, 2001 4 Transaction Background On March 28, 1996, Airplanes Limited and Airplanes U.S. Trust (together, "Airplanes Group" or "APG") established pass through trusts to offer and sell $4,048 million in aggregate principal amount of subclass A-1, A-2, A-3, A-4 and A-5 and class B, C and D pass through certificates. The proceeds from this offering, together with the proceeds from the sale of the class E notes of Airplanes Group, were used to acquire a portfolio of 229 aircraft from GPA Group plc (now known as debis AirFinance Ireland plc) and its subsidiaries. On March 16, 1998, APG established pass through trusts to offer and sell $2,437 million in aggregate principal amount of subclass A-6, A-7 and A-8 and class B certificates in connection with the refinancing of the subclass A-1, A-2 and A-3 and existing class B certificates. Assets As of January 31, 2001, APG's portfolio of aircraft consisted of 193 aircraft o 187 contracted leases with 66 lessees in 35 countries o Liquidity reserve consisting of - $80MM in maintenance reserve amount - Cash security deposit reserve amount of approximately $35.4MM - $40MM in miscellaneous reserves o Security deposits in the form of letters of credit for $288.8MM Please refer to the next page, Adjustment to Liquidity Reserves, for more details Of the six aircraft off-lease, three were subject to lease agreements and one was subject to a letter of intent as of January 31, 2001. The remaining two unplaced aircraft represented 0.34% of our portfolio by appraised value as of January 31, 2001. 5 Adjustment to Liquidity Reserves Subject to rating agency approval, as of the closing date the miscellaneous reserve amount is expected to be reduced to $nil and, solely for purposes of the "First Collection Account Top-Up" described in the Priority of Payments on page 14, the maintenance reserve amount is expected to be reduced to $60 million. The reduction of the miscellaneous reserve amount would result in the payment of the outstanding class A principal adjustment amount ($38.6 million as of February 15, 2001) and any remaining amount would be applied towards reduction of the deferred scheduled principal payment on the class C notes. The reduction of the maintenance reserve amount would allow an additional amount of up to $20 million to be applied to minimum hedge payments, class A minimum principal, class B interest, class B minimum principal and class C and D interest, but would require that amount to be retained in the Collection Account prior to payment of class A principal adjustment amount or any other amounts ranking junior to the "Second Collection Account Top-Up" under the Priority of Payments. Appraised Value At January 31, 2001, the average of the three appraised values from Airclaims Limited, Aircraft Information Systems, Inc. and BK Associates, Inc., for the remaining 193 aircraft in the portfolio was $3,135.4 million (the "Appraised Value"). Aircraft Summary o At January 31, 2001, APG's portfolio of aircraft consisted of 28 (% by Appraised Value) different aircraft types o Major aircraft types as a percentage of total appraised value are as follows: - 16.8% Boeing 737-400 - 13.8% McDonnell Douglas MD-83 - 10.4% Airbus A320-200 - 7.0% Boeing 737-500 - 6.2% Boeing 737-300/-300QC - 3.5% Boeing 757-200 6 Lessees (% by Appraised Value) As of January 31, 2001, APG had: o 66 lessees in 35 countries o Largest lessee, Air Canada, represented 9.0% of the portfolio o Largest country, U.S., represented 13.1% of the portfolio o Average remaining contracted lease term was 29 months o All existing leases are denominated in U.S. dollars 7 Servicer GE Capital Aviation Services, Limited ("GECAS") is the servicer for APG's portfolio. GECAS is headquartered in Shannon, Ireland where it had 97 employees as of January 31, 2001. GE Capital Aviation Services, Inc., of which GECAS is a subsidiary, has a further 130 employees worldwide and has operations in Stamford, Connecticut; Shannon, Ireland; Miami, Florida and a number of other locations. GECAS is a global commercial aviation financial services company that offers a range of aircraft financial products and provides management, marketing and technical support services to airlines, aircraft owners, lenders and investors as well as various of its affiliates and other third parties, including the GE Group, Aircraft Finance Trust, debis AirFinance Ireland and Airplanes Group. As of January 31, 2001, GECAS and its affiliates managed a portfolio consisting of 1,071 aircraft on lease to more than 161 lessees in 62 countries throughout the world. As of January 31, 2001, GECAS had also committed to purchase a total of 417 new aircraft from manufacturers, deliverable through December 2007. On November 20, 1998, GECAS' affiliate, GE Capital, acquired the class E notes previously held by GPA Group (now known as debis AirFinance Ireland) and its subsidiaries. GECAS holds 5% of the ordinary share capital of Airplanes Holdings, and GE Capital has an option to acquire the residual interest in Airplanes U.S. Trust from AerFi, Inc. The servicer does not assume any liability or accountability for (i) the terms and conditions of the Certificates, (ii) the ability of Airplanes Group to comply with the terms and conditions of the Certificates or the Guarantees and (iii) the structuring or implementation of any aspect of the various transactions contemplated by this Preliminary Term Sheet. The duties and obligations of the servicer are limited to those expressly set forth in the Servicing Agreement and the servicer does not have any fiduciary or other implied duties or obligation to Airplanes Group or any other person, including any certificateholder. 8 AIRPLANES PASS THROUGH TRUST I. Transaction Overview (continued) Ownership Structure Airplanes/REFI Mar O1/Marketing/Term Sheet/Term_sheet_diagrams.ppt ------------ |Charitable| | Trusts | | (Jersey) | ------------ option to | 100% equity interest purchase residual | interest in v ----------------- Airplanes Trust ---------------- -------------------- | AerFi, Inc. Inc.| |GE Capital (1)| |Airplanes Limited | | (Delaware) |-----------------> | (New York) | | (Jersey) | ----------------- --------------- -------------------- | residual | 100% indirect | 95% equity interest | interest | equity interest | | | | v v v ---------------------- ----------- --------------------- |Airplanes U.S. Trust| |GECAS (1)| 5% equity interest | Airplanes Holdings |------------------ | (Delaware) | |(Ireland)|---------------------- > | (Ireland) | | ---------------------- ----------- --------------------- | | 100% equity | | | interest v 100% equity interest | v ----------------------- | ---------------- |Aircraft-owning | | |AeroUSA | | aircraft | | aircraft |and subsidiary| | and aircraft-leasing| | ownership ---------------- | companies | | | ----------------------- | | aircraft | aircraft ownership | | ownership | | v v | --------------- ---------------- | | 16 aircraft | | 177 aircraft | < --------------------- --------------- ----------------
(1) The Certificates are not obligations of, or guaranteed by, or offered for sale by GE Capital, GECAS or any of their affiliates 9 AiRPLANES PASS THROUGH TRUST II. Structural Summary Issuer Airplanes Pass Through Trust, a New York trust, established in March 1996 Offering o Rule 144A and Regulation S, with registration rights o Failure to register the subclass A-9 Certificates on or before December 17, 2001 will result in a 0.50% increase in their coupons Underwriters Lead Manager and Sole Book-Runner: Morgan Stanley Dean Witter Co-Lead Manager: Lehman Brothers Expected Pricing Date On or about March 6, 2001 Expected Settlement March 15, 2001 Same-day funds through DTC, Clearstream and Euroclear Payment Dates The 15th of every month, beginning April 17, 2001 Day Count Basis Actual/360 Redemption Provisions o Premium redemption rates for early redemptions and refinancings o Redemptions from available collections to be made without premium Redemption of the Subclass A-9 Certificates Redemption Date Redemption Premium --------------- ------------------ After March 15, 2001................. 101.00% On or after March 15, 2002........... 100.50% On or after March 15, 2003........... 100.00%
10 Exchange Offer and RegistrationRequirement If the subclass A-9 certificates are not registered and exchanged through an exchange offer on or before December 17, 2001, the interest rate on the subclass A-9 certificates will increase by 0.50% per annum until such an exchange offer is completed or registration statement is declared effective by the SEC. Legal Maturity Date March 15, 2019 Minimum Denominations The subclass A-9 Certificates will be issued in denominations of US$100,000 and integral multiples of US$1,000 in excess thereof. The subclass A-9 Certificates will be subject to certain restrictions on transfer until the exchange offer therefor is consummated. ERISA Eligibility The subclass A-9 Certificates may be eligible for purchase by an employee benefit plan or other plan subject to Title 1 of ERISA or Section 4975 of the United States Internal Revenue Code of 1986, as amended. Listing Luxembourg Stock Exchange 11 Leases Most of the leases are operating leases under which APG generally retains the benefit and bears the risk of the residual value of the aircraft at the end of the lease. The lessees are obliged to make rental payments and generally assume responsibility for: o ensuring proper operation and maintenance of the aircraft o providing indemnification and insurance for losses resulting from operation of the aircraft o paying all costs of operating and maintaining the aircraft and keeping the aircraft free of liens o complying with all governmental licensing and other requirements o grossing up payments where payments are subject to withholding or other taxes 12 AIRPLANES PASS THROUGH TRUST II. Structural Summary (continued) Annual Lease Remarketing Tasks No. of Leases Rolling Off As % of Appraised Value (As of 31-Jan-01) (GRAPHIC OMITTED) # of Leases 2001 2002 2003 2004 2005 ---- ---- ---- ---- ---- Turboprop 11 13 3 - 1 Freighter 2 8 6 3 - Widebody 2 3 2 1 1 Narrowbody 22 33 33 17 9 ---- ---- ---- ---- ---- Total 37 57 44 21 11 Inserted on 2/14/01 from CMSDOCS/204674 Copy and paste as paste special, as a picture, not floating, but either directly into text or into a table cell. 13 AIRPLANES PASS THROUGH TRUST II. Structural Summary (continued) Priority of Payments CMSDOCS/ 204494 Collections | v (1) Required Expense ------->(2) Class A Interest --->(12) Class C Amount / and Swap Payments | Scheduled Principal / | | / | v (3) First Collection / | (13) Class D ------------>(14) Modification Account Top-up <----- | Scheduled Principal / Payments | | / | | / v | / (4) Minimum Hedge ---------->(5) Class A Minimum | (15) Class A Note<--------- (16) Class E Payment Principal | Step-up Interest ---------->Minimum Interest | | | | | | v | v (6) Class B Interest | (18) Class B <------------ (17) Supplemental | | Supplemental Principal Hedge Payment | | | | | | v | v (7) Class B Minimum | (19) Class A | | Supplemental Principal | | | | | | v | v (8) Class C Interest | (20)Class D | | Outstanding Principal | | | | | | v | v (9) Class D Interest | (21) Class C ----------> (22) Class E / | Outstanding Principal Supplemental Interest / | | / / | | / / | v / (10) Second Collection<--- (11) Class A Principal | (23) Class B <----------- Account Top-up -------> - Adjustment Amount --| Outstanding Principal | | v (24) Class A (25) Subordinated Outstanding Principal-----> Swap Payments | | v (26) Class E Accrued Unpaid Interest | | v (27) Class E Outstanding Principal
14 Declining Balances of the Certificates under the Base Case (SMM) -------------------------------------------------------------------------------- AIRPLANES PASS THROUGH TRUST III. Assumptions Base Case Assumptions Under the base case assumptions, the chart below summarizes monthly cash amounts available to service the certificates. % of Lease Cash Flows Rentals Airplanes Group Assumptions ---------- ------- --------------------------- Lease Rentals 100.0% o Lease rental rollout assumption has changed from original transaction and 1998 Refinancing base case (detail next page) o Sale at the end of useful life for 12% of assumed value when new (1) Less: Net Stress-Related Costs (6.0%) o 6.0% of lease rentals assumed lost due to aircraft downtime, bad debts, and aircraft repossession costs, offset by security deposits drawn after an event of default and any other lease income which includes lease termination payments and default interest Plus: Interest Earned + 2.0% o One month LIBOR on all cash balances Plus: Net Maintenance + 0.0% o Maintenance receipts assumed to equal maintenance expenses Less: Aircraft Operating Expenses (5.0%) o 5.0% per annum of lease rentals SG&A (8.0%)(2) o SG&A expenses represent the sum of - Servicer fees payable to GECAS and administrative fees payable to the administrative agent, both of which contain a portion which will decrease proportionately with the number of aircraft remaining in the portfolio after APG's portfolio has been reduced to 153 aircraft - Cash manager fees - Other SG&A and other expenses Equals: Cash Available to 83.0% o 83.0% of lease rentals available to pay interest and principal on Certificateholders the notes and certificates
---------------- (1) Except for 3 B737-200As leased to Air Canada under finance leases which, in line with the terms of such finance leases, are assumed to have a residual value of $1 million each at the expiry of current lease (2) As percentage of Assumed First Year's Lease Rentals 15 Assumptions Original Transaction and 1998 Refinancing 2001 Refinancing -------------------- ---------------- Annual decline in lease rate: Age of Aircraft (in years, % per annum): 1-5................................................. 0.0 2.0 6-15................................................ 0.0 1.0 16-20............................................... 6.0 3.0 Thereafter.......................................... 6.0 5.0 Sale Value at End of Useful Life.................... 0.0% 12.0% (1) Useful Life (yrs) for Passenger Aircraft............ 20.0-25.0 22.5-25.0 Useful Life (yrs) for Freighters (2)................ 20.0 20.0 Stress Costs........................................ (6.0%) (6.0%) Maintenance......................................... 0.0% 0.0% Interest Earned..................................... +2.0% +2.0% Aircraft Operating Expenses......................... (2.0%) (5.0%) SG&A................................................ (7.5%) (8.0%) ------ ------ Net Cash to Certificateholders + 86.5% + 83.0%
(1) Except for 3 B737-200As leased to Air Canada under finance leases which, in line with the terms of such finance leases, are assumed to have a residual value of $1 million each at the expiry of current lease (2) Years from the date of conversion to freighter service 16 AIRPLANES PASS THROUGH TRUST III. Assumptions (continued) Useful Life Assumptions Aircraft Expected Useful Type Life (yrs.) (1) ------------------ --------------- Passenger Jet Aircraft A300 25.0 A320-200 25.0 B727-200A 22.5 B737-200A 25.0 B737-300/400/500 25.0 B757-200 25.0 B767-200ER/300ER 25.0 DC9-32/51 22.5-25.0 F-100 25.0 MD-11 25.0 MD-82/3/7 25.0 Freighter Jet Aircraft (Z) B747-200SF 20.0 DC8-71F/73CF 20.0 Turboprops ATR42-300 22.5 DHC8-100/300/300C 22.5 METRO-111 22.5 (1) We assume that each aircraft has an expected useful life that corresponds to its aircraft type as set forth in the table above or, if longer, the number of years from the date of manufacture or conversion to freighter service of the aircraft to the date of termination of the current lease of the aircraft (2) Expected Useful Life in years from the date of conversion to freighter service 17 Base Case Results Percent of Initial Outstanding Principal Balance of the Certificates under the Base Case: Aggregate Class A Subclass Subclass Subclass Certificates, including Payment Date Occurring in March A-6 A-8 A-9 Refinancing Certificates ------------------------------- --- --- --- ------------------------ 2001 (Closing Date) 48% 100% 100% 74% 2002 31% 100% 100% 69% 2003 14% 0% 100% 63% 2004 0% 0% 96% 57% 2005 0% 0% 74% 50% 2006 0% 0% 50% 43% 2007 0% 0% 29% 37% 2008 0% 0% 11% 31% 2009 0% 0% 0% 26% 2010 0% 0% 0% 21% 2011 0% 0% 0% 16% 2012 0% 0% 0% 11% 2013 0% 0% 0% 8% 2014 0% 0% 0% 4% 2015 0% 0% 0% 2% 2016 0% 0% 0% 0% 2017 0% 0% 0% 0% Weighted Average Life (yrs) 1.5 2.0 5.1 6.4
18 Declining Balances of the Certificates under the Base Case ($MM) [GRAPHIC OMITTED] [Graph showing declining balances of the certificates and the expected portfolio value 2001-2017.] 19 -------------------------------------------------------------------------------- AIRPLANES PASS THROUGH TRUST IV. Stress Tests 1. Effect of Inability to Refinance Subclass A-8 Certificates The table below is based on the assumptions, except that the assumption has been made that no refinancing certificates are issued. If no refinancings occur, the expected maturity (Exp) and weighted average life (Avg) of the subclass A-9 certificates would be as set forth below. Expected Maturities and Weighted Average Lives of Certificates Expected Maturity/Weighted Average Life ------------------------------------------------------------- Base Case No Refinancings ------------------------------------------------------------- Exp Avg Exp Avg --- --- --- --- Subclass A-9 7.7 5.1 15.8 10.5 2. Minimum Revenue Percentage Required to Repay Certificates The following tables show the minimum percentage of lease rentals that will be necessary to repay all interest and principal on the class A certificates by their final maturity date. If APG received actual revenues below the percentages of lease rentals indicated below and all of the other assumptions proved to be correct, APG would be unable to make the required payments on the notes and certificates, which would constitute an event of default. Percentage of Lease Rentals Necessary to Repay the Certificates by the Final Maturity Date Assuming Actual Experience Corresponds to the Base Case until the Beginning of the Year Stated Closing Date Year 3 Year 6 Year 10 ------------ ------ ------ ------- Class A 57.5% 54.5% 47.9% 36.0% 20 3. Effect of a Permanent Change in Lease Rentals The tables below have been prepared based on the assumptions, except that the revenue received by APG from lease rentals has been varied by the indicated percentages, beginning in years 3 and 6. If APG received actual lease rentals as indicated below and all of the other assumptions proved to be correct, then the expected maturity and weighted average life of the subclass A-9 certificates would be as set forth below. Expected Maturities and Weighted Average Lives of Subclass A-9 Certificates Assuming a Permanent Change in Lease Rentals, Beginning in Year 3 Permanent Change in Lease Rentals as a Percentage of Lease Rentals -------------------------------------------------------------------------------- Exp Avg --- --- (Years) Base Case + 10% 7.7 5.0 Base Case + 5% 7.7 5.0 Base Case 7.7 5.1 Base Case - 5% 8.3 5.6 Base Case - 10% 8.3 5.8 Expected Maturities and Weighted Average Lives of Subclass A-9 Certificates Assuming a Permanent Change in Lease Rentals, Beginning in Year 6 Permanent Change in Lease Rentals as a Percentage of Lease Rentals -------------------------------------------------------------------------------- Exp Avg --- --- (Years) Base Case + 10% 7.7 5.1 Base Case + 5% 7.7 5.1 Base Case 7.7 5.1 Base Case - 5% 7.7 5.2 Base Case - 10% 8.2 5.3 21 4. Effect of a Permanent Decline in Portfolio Value The following tables show the expected maturity and weighted average life of the subclass A-9 certificates if the adjusted portfolio values permanently declined to a given percentage of the expected portfolio value, beginning in years 1 and 5. Expected Maturities and Weighted Average Lives of Subclass A-9 Certificates Assuming a Permanent Change in Portfolio Value, Beginning in Year 1 Adjusted Portfolio Value as a Percentage of Expected Portfolio Value Beginning in Year 1 -------------------------------------------------------------------------------- Exp Avg --- --- (Years) 110% 8.1 5.7 105% 7.9 5.4 Base Case (100%) 7.7 5.1 95% 7.3 5.1 90% 7.3 5.1 Expected Maturities and Weighted Average Lives of Subclass A-9 Certificates Assuming a Permanent Change in Portfolio Value, Beginning in Year 5 Adjusted Portfolio Value as a Percentage of Expected Portfolio Value Beginning in Year 5 -------------------------------------------------------------------------------- Exp Avg --- --- (Years) 110% 8.1 5.5 105% 7.9 5.3 Base Case (100%) 7.7 5.1 95% 7.3 5.1 90% 7.3 5.1 22