Notes Payable and Accrued Interest

9 Months Ended

Sep. 30, 2013

Notes Payable and Accrued Interest [Abstract]

Notes Payable and Accrued Interest

4.Notes Payable and Accrued Interest

At September 30, 2013 and December 31, 2012, the Company’s notes payable and accrued interest consisted of the following:

	September 30,		December 31,
	2013		2012
Credit Facility principal	$	64,500,000	$	67,800,000
Credit Facility accrued interest		32,400		65,700
	$	64,532,400	$	67,865,700

In March 2013, the Company’s Credit Facility (the “Credit Facility”) provided by a syndicate of banks was increased from $90 million to $130 million and the maturity date was extended to September 30, 2015. The Credit Facility is secured by all of the assets of the Company, including its aircraft and engine portfolio.

As of September 30, 2013, the Company was out of compliance with a customer concentration covenant under its Credit Facility agreement.  The higher than anticipated concentration resulted in part from the Company recognizing operating lease revenues from certain lessees on a cash basis, as collectability was not reasonably assured.  Based on its current projections, the Company believes it may be out of compliance with this covenant at the December 31, 2013 calculation date for the same reason.  The Credit Facility banks have granted a waiver of compliance with this covenant for the September 30, 2013 and December 31, 2013 calculation dates.  The Company was in compliance with all covenants under the Credit Facility agreement at December 31, 2012.

The unused amount of the Credit Facility was $65,500,000 and $22,200,000 as of September 30, 2013 and December 31, 2012, respectively; however, the amount available on those respective dates was limited to $16,517,500 and $1,113,500, respectively, due to borrowing base limitations.

The weighted average interest rate on the Credit Facility was 3.94% and 4.00% at September 30, 2013 and December 31, 2012, respectively.