Avolon Announces Early Tender Results and Expansion of Debt Tender Offers
Avolon Holdings Limited (“Avolon” or the “Company”), a premier global aviation finance company, today announced the early results of its previously announced cash tender offers initiated by Avolon Holdings Funding Limited, a Cayman Islands exempted company and wholly-owned subsidiary of Avolon (the “Offeror”). The tender offers apply to certain outstanding notes issued by the Offeror (the “Notes”), detailed in the table provided below.
This announcement outlines the progress of these offers, which were made pursuant to an offer to purchase dated May 19, 2025 (the “Offer to Purchase”), as amended or supplemented from time to time. The Company’s announcement also includes an important update: an increase in the aggregate purchase price cap for the Notes that the Offeror intends to repurchase, from the previously stated amount of $800 million to $1.2 billion, representing a significant upsizing of the tender offer program.
Overview of the Tender Offers
The tender offers provide Noteholders the opportunity to sell their Notes back to the Offeror for cash, subject to specified terms and conditions. The Offers were made to provide Avolon with a flexible mechanism to manage and optimize its capital structure while demonstrating the Company’s strong liquidity position and confidence in its financial outlook. By repurchasing outstanding Notes at a discount or par, Avolon seeks to reduce its overall debt burden, lower interest expenses, and extend debt maturities, thereby enhancing long-term shareholder value.
Acceptance Priority Levels and Maximum Tender Cap
Avolon’s tender offers are structured with multiple Series of Notes, each with a defined “Acceptance Priority Level” that governs the order in which Notes will be accepted for purchase. This tiered approach ensures that Notes with higher priority levels are accepted first, subject to the overall Maximum Tender Cap, before lower-priority Notes are considered.
The Maximum Tender Cap, which is the total maximum aggregate principal amount of Notes the Offeror intends to purchase (excluding accrued interest), has been increased to $1.2 billion. This adjustment reflects Avolon’s intention to be more opportunistic in its capital management strategy by purchasing a larger amount of Notes than initially planned. The Company believes this upsizing demonstrates strong market demand and Noteholder participation in the Offers.
Subject to the Maximum Tender Cap, Notes validly tendered and not withdrawn at or prior to the Early Tender Deadline will be accepted first in accordance with their Acceptance Priority Level. Notes tendered after the Early Tender Deadline but at or before the Expiration Date will be accepted only if there is remaining capacity after satisfying earlier tenders with higher priority.
Early Tender Deadline and Early Settlement Date
The Offers include an Early Tender Deadline, a specified cutoff date and time by which Noteholders may tender their Notes to be eligible for an early settlement. The Offeror has elected to pay for the Notes validly tendered and not withdrawn by this Early Tender Deadline on June 5, 2025 (the “Early Settlement Date”). This early settlement feature incentivizes Noteholders to tender their Notes promptly to receive payment sooner than the general settlement date.
Noteholders who validly tender and do not withdraw their Notes by the Early Tender Deadline will receive the Early Tender Consideration, which generally includes a premium over the final purchase price. Those who tender after the Early Tender Deadline but before the Expiration Date will receive a lower purchase price consistent with the terms outlined in the Offer to Purchase.
The Offers are subject to customary terms and conditions, including but not limited to, the Company’s right to amend, extend, or terminate the Offers, satisfaction of certain conditions precedent, and proration in the event that Notes tendered exceed the Maximum Tender Cap.
The Offer to Purchase provides detailed information regarding the procedures for tendering Notes, payment timing, proration mechanics, and rights of Noteholders to withdraw tenders under certain circumstances. It also outlines the conditions under which the Offeror may reject tenders or terminate the Offers altogether.
Strategic Rationale
This upsized tender offer program is a clear indication of Avolon’s proactive approach to capital management in a dynamic market environment. The Company’s ability to offer increased purchase capacity reflects strong liquidity and access to capital markets, which are critical in supporting its fleet financing and growth initiatives.
By repurchasing its outstanding debt instruments, Avolon is positioning itself to reduce interest costs and extend debt maturities, thereby improving financial flexibility and supporting sustainable growth. This action aligns with the Company’s commitment to delivering value to shareholders and maintaining a strong balance sheet.
About Avolon
Avolon is one of the world’s leading aircraft leasing companies, providing fleet leasing and management services to airlines globally. With a diversified portfolio of over 700 aircraft and a customer base spanning more than 60 airlines worldwide, Avolon plays a critical role in supporting the aviation industry’s growth and recovery. The Company’s expertise in aviation finance, coupled with its global presence, enables it to deliver innovative leasing solutions tailored to the evolving needs of its customers.
Summary of Notes Subject to the Offers
| Series | Principal Amount Outstanding | Acceptance Priority Level | Maximum Purchase Amount |
|---|---|---|---|
| 5.125% Senior Notes due 2027 | $450 million | 1 | Up to $450 million |
| 4.75% Senior Notes due 2029 | $550 million | 2 | Up to $550 million |
| 4.25% Senior Notes due 2031 | $500 million | 3 | Up to $250 million |
Next Steps for Noteholders
Noteholders interested in participating in the Offers should carefully review the Offer to Purchase and any related documents, which provide comprehensive details about the terms and procedures for tendering their Notes. Questions or requests for assistance may be directed to the Company’s information agent or financial advisors listed in the Offer documentation.
The Offers remain subject to change or termination at the discretion of the Offeror, and Noteholders should monitor official communications closely to stay informed of any updates.