Subsequent Events

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

(a) MUFG’s Sale of Indebtedness to Drake

On October 30, 2020, Drake Asset Management Jersey Limited (“Drake”), purchased from the MUFG Lenders all of the outstanding indebtedness of the Company under such loan, totaling approximately $87.9 million as well as all of the Company's indebtedness to MUFG Bank, Ltd. of approximately $3.1 million for termination of interest rate swaps entered into with respect to such Loan Agreement indebtedness (such total indebtedness with Drake as Lender referred to as the “Drake Indebtedness”).  The purchase and sale was consented to by the Company pursuant to a Consent and Release Agreement of Borrower Parties, entered into by the Company and its subsidiaries.  The closing of this debt purchase transaction satisfied the requirement under the Loan Agreement for execution of a Strategic Alternative with respect to the MUFG Loan indebtedness satisfactory to the MUFG Lenders.

On the same day, the Company entered into an Amendment No. 1 to the Loan Agreement (“Amendment No. 1”) with Drake and UMB Bank, N.A., the replacement Administrative Agent under the Loan Agreement, to amend the Loan Agreement (such Loan Agreement as amended, with Drake as Lender thereunder, referred to as the “Drake Loan Agreement”) as follows:

●  Deferral of the cash component of the interest payments due under the Drake Loan Agreement, commencing with the payments due for March 2020, and continuing on each consecutive month thereafter, which deferred interest is to be capitalized and added to the principal balance of the indebtedness on each respective interest payment due date, until such time as the indebtedness is repaid.  

●  Deletion of the requirement for the Company's execution of a Strategic Alternative and of the milestones therefor;

●  Deletion of the requirement for the Company's maintenance of a restricted account held with an MUFG Lender to hold aircraft sales proceeds pending application toward the Drake Indebtedness;

●  Replacement of references to “MUFG Union Bank, N.A.,” with “UMB, Bank, N.A.”, the new Administrative Agent under the Loan Agreement;

●  Requirement of  approval by Drake for any “Material Amendments” to leases for the collateral, defined as any amendment of, or waiver or consent under, any lease involving a modification of lease payments, any reduction in, or waiver or deferral of, Rent, a modification to any residual value guaranty, any modification that adversely affects the collateral or the rights and interests of the lender and/or administrative agent in the collateral, any reduction of any amounts payable to any lender or Agent under any indemnity, or any change to the state of registration of aircraft collateral; and

●  Deletion of certain financial reporting requirements and changes to required frequency of certain other surviving reporting requirements.

The Drake Indebtedness is secured by a first priority lien held by Drake, which lien is documented in an amended and restated mortgage and security agreement assigned to Drake,  on all of the Company's assets, including the Company’s aircraft portfolio, except for two aircraft on lease to Kenyan lessees and five aircraft, two of which were sold in October 2020, that are subject to special purpose financing held by subsidiaries of the Company.

The Company and Drake are currently engaged in discussions regarding the satisfaction and discharge of the Drake Indebtedness.

(b) Sale of Aircraft

In October 2020, the Company sold two aircraft to the lessee that were subject to Nord Loans, and fully repaid the indebtedness on such aircraft with the proceeds of the sale. The excess proceeds from the purchase were applied to the remaining Nord Term Loan indebtedness owed by a special-purpose subsidiary of the Company secured by three regional jets on lease to a U.S. regional airline.