AeroCentury executes strategic alternative with Drake, amends loan

Chicago, Nov. 12 – AeroCentury Corp. amended its $87.9 million fourth amended and restated loan that was held by MUFG Union Bank, NA as agent and the debt to MUFG Bank, Ltd. of approximately $3.1 million from the termination of interest rate swaps related to loan agreement debt, according to a press release.

The loan is no longer held by MUFG. The debt was purchased by Drake Asset Management Jersey Ltd. on Oct. 30, which qualified as a strategic alternative.

On Oct. 30, the company entered into the first amendment on its loan agreement with Drake and UMB Bank, NA as the replacement administrative agent.

The amendment does the following:

• Defers the cash component of the interest payments due, starting with the payments due for March, and adds the deferred interest to the principal of the loan on each respective interest payment date until the debt is repaid;

• Deletes the requirement for the execution of a strategic alternative;

• Deletes 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 loan agreement debt;

• Replaces the administrative agent with UMB, Bank, NA from MUFG;

• Requires approval by Drake for any material amendments to leases for the collateral; and

• Deletes certain financial reporting requirements and changes the required frequency of certain other surviving reporting requirements.

AeroCentury and Drake are currently discussing discharging the debt, with no assurance there will be an agreement to that effect.

Drake is a specialist investment business focused on the regional aviation sector.

AeroCentury is an aircraft operating lessor and finance company based in Burlingame, Calif.

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