F-1 1 file1.htm Table of Contents

As filed with the Securities and Exchange Commission on November 27, 2006
Registration No. 333-          

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Genesis Lease Limited

(Exact Name of Registrant as Specified in Its Charter)


Bermuda 7359 98-0512319
(State or Other Jurisdiction of Incorporation or Organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification No.)
  Roselawn House
University Business Complex
National Technology Park
Limerick, Ireland
Tel. +353 61 633 333
 

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)


  Puglisi & Associates
850 Library Avenue, Suite 204
Newark, Delaware 19711
Tel. (302) 738-6680
 

(Name, Address, Including Zip Code and Telephone Number, Including Area Code, of Agent for Service)


  Copies to:  
David S. Lefkowitz, Esq.
Boris Dolgonos, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Tel. (212) 310-8000
  Elliot Gewirtz, Esq.
Douglas A. Tanner, Esq.
Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaza
New York, New York 10005
Tel. (212) 530-5000

Approximate date of commencement of proposed sale to the public:   As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box. [ ]

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. [ ]

CALCULATION OF REGISTRATION FEE


Title of Each Class Of
Securities To Be Registered
Amount to be
Registered
Proposed Maximum
Offering Price
Per Share
Proposed Maximum
Aggregate
Offering Price
Amount of
Registration Fee
Common shares, par value $.001 per share (1) 32,039,000(2
)
$ 23.00
$736,897,000(2)(3) $78,848(4)
(1) American Depositary Shares issuable upon deposit of the common shares registered hereby have been registered under a separate registration statement on Form F-6. Each American Depositary Share represents one common share.
(2) Includes 4,179,000 common shares that may be sold upon exercise of the underwriters' over-allotment option.
(3) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c).
(4) Calculated in accordance with Rule 457(a).

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.




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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED NOVEMBER 27, 2006

PROSPECTUS

27,860,000 American Depositary Shares

Genesis Lease Limited

Representing 27,860,000 Common Shares

$                 per ADS

We are selling 27,860,000 common shares in the form of American Depositary Shares, or ADSs. Each ADS represents one common share. The ADSs will be evidenced by American Depositary Receipts, or ADRs. We have granted the underwriters an option to purchase up to 4,179,000 additional ADSs to cover over-allotments.

This is the initial public offering of our ADSs. We currently expect the initial public offering price to be between $21.00 and $23.00 per ADS. Our ADSs have been approved for listing on the New York Stock Exchange, subject to official notice of issuance, under the symbol ‘‘GLS.’’ All of our common shares will be issued in the form of ADSs. We will pay all fees of the depositary, except in connection with cancellations of ADSs and withdrawals of common shares.

An affiliate of General Electric Company, or GE, has agreed to purchase from us, in a private placement concurrent with this offering, a number of ADSs such that after this offering GE will hold approximately 11% of the issued and outstanding ADSs, at a price per ADS equal to the initial public offering price in this offering.

Investing in our ADSs involves risks. See ‘‘Risk Factors’’ beginning on page 16.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.


  Per ADS Total
Public Offering Price $            
$              
Underwriting Discount $
$
Proceeds to Genesis Lease Limited (before expenses) $
$

The underwriters expect to deliver the ADSs to purchasers on or about                 , 2006.

Citigroup JPMorgan

Merrill Lynch & Co. Wachovia Securities

                                     , 2006




You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different information, you should not rely on it. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where an offer is not permitted. The information in this prospectus is only accurate on the date of this prospectus.

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Consent under the Exchange Control Act 1972 (and its related regulations) has been obtained from the Bermuda Monetary Authority for the issue and transfer of our common shares to and between non-residents of Bermuda for exchange control purposes, provided our ADSs remain listed on an appointed stock exchange, which includes the New York Stock Exchange. This prospectus will be filed with the Registrar of Companies in Bermuda in accordance with Bermuda law. In granting such consent and in accepting this prospectus for filing, neither the Bermuda Monetary Authority nor the Registrar of Companies in Bermuda accepts any responsibility for our financial soundness or the correctness of any of the statements made or opinions expressed in this prospectus.

Until                     , 2007 (25 days after the date of this prospectus), all dealers that buy, sell or trade our ADSs, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to each dealer’s obligation to deliver a prospectus when acting as underwriter and with respect to its unsold allotments or subscriptions.

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SUMMARY

This section summarizes key information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere in this prospectus. You should carefully review the entire prospectus, including the risk factors, the financial statements and the notes related thereto and the other documents to which this prospectus refers, before making an investment decision.

Summaries in this prospectus of certain documents that are filed as exhibits to the registration statement of which this prospectus is a part are qualified in their entirety by reference to such documents. All information and data contained in this prospectus relating to the commercial aircraft industry has been provided to us by Simat, Helliesen & Eichner, Inc., or SH&E, an international air transport consulting firm. See ‘‘The Commercial Aircraft Industry.’’

Unless the context requires otherwise, when used in this prospectus, (1) the terms ‘‘Genesis,’’ ‘‘we,’’ ‘‘our’’ and ‘‘us’’ refer to Genesis Lease Limited and its subsidiaries, (2) all references to our shares refer to our common shares held in the form of ADSs and (3) all percentages and weighted averages of the aircraft in our portfolio have been calculated using the lower of mean or median maintenance-adjusted appraised base values as of June 30, 2006, and percentages may not total due to rounding.

Our Company

We are a newly organized company formed to acquire and lease commercial jet aircraft and other aviation assets. Our aircraft are leased under long-term contracts to a diverse group of airlines throughout the world. Our strategy is to grow our portfolio through accretive acquisitions of aircraft, while paying regular quarterly dividends to our shareholders. We intend to leverage the worldwide platform of GE Commercial Aviation Services Limited, or GECAS, to service our portfolio of leases, allowing our management to focus on executing our growth strategy.

We will acquire our initial portfolio of 41 commercial jet aircraft from affiliates of GE with the net proceeds of this offering, a concurrent private placement of shares to GE and an $810 million aircraft lease securitization. We refer to this portfolio as our Initial Portfolio. The aircraft in our Initial Portfolio are modern, operationally efficient passenger and cargo jet aircraft that have long expected remaining useful lives. As of September 30, 2006, the weighted average age of our aircraft was 5.5 years, and the weighted average remaining lease term on our aircraft was 5.9 years. All of our aircraft are subject to net operating leases under which the lessee is responsible for most operational and insurance costs, and 38 of the 41 leases in our Initial Portfolio are subject to fixed rental rates. Our leases are scheduled to expire between 2008 and 2017, and we refer to them as long-term leases. We believe the terms of our leases will provide us with a stable source of revenues and cash flows.

We believe we can capitalize on the overall size and growth of the global aircraft market by acquiring and leasing additional aircraft and other aviation assets to increase our revenues, earnings and cash flows. Between 1990 and 2005, global passenger traffic, measured in revenue passenger miles, increased by 115%, or an average of 5.2% per year, and Boeing forecasts 4.9% average annual revenue passenger mile growth from 2006 through 2025. The current global fleet of operating commercial jet aircraft consists of more than 17,000 aircraft, and the fleet is expected to increase by an average of 2.9% per year through 2023 as a result of continued growth in passenger and cargo traffic, particularly in emerging markets. Over the past 20 years, the world’s airlines have leased a growing share of their aircraft instead of owning them outright. The proportion of the global fleet under operating lease has increased from approximately 18% in 1990 to 30% in 2005. We believe these industry trends provide a large and growing available pool of aircraft and other aviation assets to acquire and lease in the future.

Pursuant to long-term agreements, GECAS will provide us with most services related to leasing our fleet, including marketing aircraft for lease and re-lease, collecting rents and other payments from the lessees of our aircraft, monitoring maintenance, insurance and other obligations under our leases

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and enforcing rights against lessees. We will pay GECAS a base servicing fee, additional servicing fees based on rental amounts due and paid under our leases and sales fees for assisting in aircraft dispositions. The pro forma servicing fees we would have paid to GECAS in 2005 had we owned the Initial Portfolio as of January 1, 2005 would have been approximately $4.7 million.

Our arrangements with GECAS will enable our management team to focus primarily on pursuing acquisitions of additional aircraft and other aviation assets. Our founding management has substantial expertise in the acquisition, leasing, financing, technical management and sale of aircraft. To complement our management's sourcing efforts, we have entered into a business opportunities agreement with GECAS, which we expect will lead to opportunities to purchase aircraft from third-party sources that GECAS encounters in its global operations, as well as certain aircraft offered directly by GECAS.

GECAS is an affiliate of GE and is one of the world’s leading servicers of commercial aircraft. GECAS currently manages a portfolio that includes more than 1,400 owned aircraft plus more than 250 aircraft serviced for other owners. It has more than 220 passenger and cargo airline customers in over 70 countries and more than 80 employees dedicated to the marketing and technical management of leased aircraft. We will have a global reach through GECAS’s 23 worldwide offices and will benefit from GECAS’s extensive industry knowledge and contacts to manage our portfolio and to source aircraft acquisitions. We believe GECAS’s broad industry expertise as the owner and servicer of one of the world’s largest portfolios of commercial aircraft, as well as its involvement in the market for aircraft acquisitions and dispositions, will enhance our ability to manage our portfolio effectively, to acquire and lease additional aircraft and to remarket our aircraft when leases expire.

Our Competitive Strengths

We believe the following competitive strengths will enable us to capitalize on growth opportunities in the leasing industry:

•  Contracted revenues from a diversified lease portfolio.    Our Initial Portfolio consists of 41 commercial jet aircraft that are leased on a long-term, primarily fixed rate basis to a wide range of geographically diverse lessees. The aircraft in our Initial Portfolio are leased to 30 lessees in 17 countries, with scheduled lease maturities ranging from 2008 to 2017 and a weighted average remaining lease term of 5.9 years. No single lessee is expected to contribute more than 10% of our annual lease revenue in 2007, and no more than five leases are scheduled to expire in any year until 2011. We believe these qualities will contribute to the stability of our revenues.
•  Young, versatile aircraft fleet.    The weighted average age of the aircraft in our Initial Portfolio is 5.5 years as of September 30, 2006, and only 1.6% of the passenger aircraft were more than ten years old. Our Initial Portfolio consists of an array of asset types but is concentrated on modern, narrow-body aircraft that have a wide operator base. We believe these aircraft, and the additional aircraft we will seek to acquire, will be versatile assets with long useful lives that can be deployed worldwide. In addition, we expect that many of these aircraft have the potential to be converted into freighter aircraft, which would further extend their useful lives.
•  Access to market opportunities through ongoing relationships with GECAS.    We believe we will benefit directly from GECAS’s global aircraft leasing network and capabilities through our servicing agreements. We also expect that, pursuant to the business opportunities agreement, GECAS will provide us with access to market opportunities to purchase aircraft from sources that it encounters in the course of its global operations as well as certain aircraft directly from GECAS’s own fleet.
•  Experienced management and efficient platform.    Our management has extensive experience in the aviation industry. Our chief executive officer, John McMahon, has 20 years of experience in the aviation industry. Previously, Mr. McMahon was a founding member and Managing Director of debis AirFinance (now AerCap) and was instrumental in developing it

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  from a start-up into a global aircraft lessor with a portfolio of 220 aircraft operating with more than 80 airlines in over 40 countries. We believe our management's extensive relationships in the aviation industry, together with our operating arrangements with GECAS, provide us with an efficient platform from which to make accretive aircraft acquisitions and manage additional aircraft with limited incremental overhead cost.

Our Growth Strategies

We intend to grow our lease portfolio and increase distributable cash flow per share by focusing on the following strategies:

•  Capitalize on the growth in aircraft leasing by acquiring additional aircraft.    We intend to acquire additional aircraft that are accretive to cash flow, while maintaining desirable portfolio characteristics in terms of fleet age, lease term and geographic concentration. We will focus primarily on acquiring high-utility commercial jet aircraft that have long useful lives and large operator bases, such as the Boeing 737 and the Airbus A320. We believe these aircraft will continue to experience strong demand as the number of low-cost carriers and passenger traffic in emerging markets continue to increase. From time to time we also intend to evaluate different aircraft asset types or lease structures that maximize returns and distributable cash flow to shareholders.
•  Outsource servicing functions to GECAS so that management can focus on aircraft acquisitions.    We intend to leverage GECAS’s global service platform to manage our portfolio. We believe that lease servicing and remarketing is a highly technical business that benefits from a worldwide presence, well developed infrastructure and a broad network of strong customer relationships. We believe this strategy will enable management to focus on pursuing accretive acquisitions, including any presented to us by GECAS.
•  Efficiently raise capital to execute our growth strategy.    We believe our capital structure is efficient and provides flexibility to pursue acquisitions and capitalize on market opportunities as they arise. We have a commitment for a $1 billion senior secured revolving credit facility to fund acquisitions of additional aircraft. We also expect to fund our growth through additional debt and equity offerings. The terms of our debt instruments will prevent us from paying dividends if we fail to meet financial ratios or default on our debt service obligations.

Our Initial Aircraft Portfolio

Our Initial Portfolio consists of 41 aircraft on lease to 30 airlines located in 17 countries. The following charts highlight the diversity of our Initial Portfolio in terms of airframe type, aircraft age, geographic profile and lease maturity.


Airframe Type Number Percent
Narrow-body 34
79.3
%
Wide-body 1
6.8
%
Regional jet 2
2.9
%
Cargo 4
11.0
%
Total 41
100
%

Aircraft Age Number Percent
Passenger  
 
0 to 5 years 16
47.1
%
5 to 10 years 19
40.4
%
10 to 15 years 1
0.7
%
15+ years 1
0.9
%
Cargo(1) 4
11.0
%
Total 41
100
%
(1) The cargo aircraft were converted from passenger configuration in December 2000, March 2001, June 2006 and September 2006.

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Geographic Profile(1) Number Percent
Europe 16
36.4%
Asia/Pacific 12
34.6%
United States and Canada 9
18.0%
Central and South America and Mexico 3
8.9%
Middle East 1
2.0%
Total 41
100%
(1) Based on the geographic location of the lessee.
(1) Assumes no lease extensions or early terminations.
(2) Includes a Boeing 737-800 with respect to which a letter of intent has been executed to extend the lease to 2014, and a Boeing 737-800 that is currently being actively remarketed in anticipation of an early lease termination. See ‘‘Business — Our Leases — Lease Management and Remarketing.’’

Industry Trends

We believe we are well-positioned to capitalize on a number of trends in the aircraft finance and leasing industry, including:

•  Large and growing commercial aircraft fleet to meet global demand.    Globalization and economic growth throughout the developing world have led to increased demand for air travel. We expect that continued increases in the worldwide gross domestic product, economic development in emerging markets and competitive pricing resulting from the continued growth of low-cost carriers will drive further increases in air travel and aircraft demand. Boeing estimates that the current global fleet of operating commercial jet aircraft consists of 17,330 aircraft and has forecasted that by 2025 the fleet will reach 35,970 aircraft, of which 27,360 will be mainline passenger jets with 90 passenger seats or more. Airbus has estimated that the commercial jet aircraft fleet will increase to 25,375 aircraft by 2023, of which 21,759

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  will be mainline passenger jets. In dollar terms, the current global fleet has an estimated value of $350 billion and is estimated to grow to approximately $777 billion by 2025. Nevertheless, the aircraft industry is subject to demand shifts, and any downturn in discretionary business or consumer spending or increased costs could have a significant impact on air traffic and aircraft demand.
•  Continued growth in aircraft leasing with significant consolidation opportunities.    Over the past 20 years, the world’s airlines have leased a growing share of their aircraft instead of owning them outright. The proportion of the global fleet owned by operators has declined from 71% in 1990 to 54% in 2005, and the proportion of the global fleet under operating lease has increased from approximately 18% to 30% during this period. Lessors are major providers of liquidity for used aircraft and provide airlines with a valuable method of fleet management through the use of operating leases, financial leases and sale/leaseback transactions. The two largest lessors (GECAS and International Lease Finance Corporation, or ILFC) own or manage approximately 35% of the total number of aircraft under lease, while the next largest competitor’s market share is less than 5%. As a result, significant consolidation opportunities exist for lessors with adequate capital resources and financial flexibility.
•  Improving lease rates.    With the recent recovery of much of the global commercial aviation industry, aircraft values have stabilized and have begun to increase slowly for some aircraft types. For a number of aircraft types, particularly the Boeing 737 and the Airbus A320, which are highly favored by low-cost carriers, supply is limited, and there is some concern that manufacturers will be unable to satisfy demand in the near term. Demand for larger aircraft types, such as the 767-300ER and A330, is exceptionally strong and cannot be met by current aircraft availability. Reductions in supply for many aircraft types has led to an increase in lease rental rates and, in certain cases, aircraft values. However, the airline industry has been subject to cyclical demand patterns, and a reduction in lease rates could occur.

Our Dividend Policy

Our board of directors has adopted a policy to pay a regular quarterly cash dividend to our shareholders in an initial amount of $0.47 per share. We intend to pay a larger first dividend for the period from the completion of this offering to March 31, 2007.

Our dividend policy is based on the cash flow profile of our business. We generate significant cash flow under long-term leases with a diversified group of commercial aviation customers. We intend to distribute a portion of our cash flow to our shareholders, while retaining cash flow for reinvestment in our business. Retained cash flow may be used to fund acquisitions of aircraft and other aviation assets, make debt repayments and for other purposes, as determined by our management and board of directors. Our dividend policy reflects our judgment that by reinvesting cash flow in our business, we will be able to provide value to our shareholders by enhancing our long-term dividend paying capacity. Our objectives are to maintain and increase distributable cash flow per share through acquisitions of additional aircraft and other aviation assets beyond our Initial Portfolio of 41 aircraft.

The declaration and payment of future dividends to holders of our shares will be at the discretion of our board of directors and will depend on many factors, including our financial condition, cash flows, legal requirements and other factors our board of directors deems relevant. Please read ‘‘Dividend Policy — Possible Changes in Quarterly Dividends’’ and ‘‘Risk Factors’’ for a discussion of these factors.

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Our Formation

We were formed at the direction of GECAS to acquire our Initial Portfolio from affiliates of GE and to develop an independent aircraft leasing business. We will use the net proceeds of this offering, together with the proceeds from a private placement of shares to GE and the net proceeds of the securitization described below, less certain expenses as described under ‘‘Use of Proceeds,’’ to finance the acquisition of our Initial Portfolio from affiliates of GE. The purchase price that we will pay for our Initial Portfolio will be determined based on the initial public offering price in this offering as described below, even if the price is above or below the price range set forth on the cover of this prospectus, and will not be based upon a valuation of such assets. The acquisition of our Initial Portfolio will be made through our subsidiary, Genesis Funding Limited, which we refer to as Genesis Funding.

On November 21, 2006, Genesis Funding entered into an agreement to complete a securitization that will close concurrently with this offering. The securitization will generate net proceeds of approximately $804.5 million through the issuance of floating-rate aircraft lease-backed notes, which will finance part of the cost of the acquisition of our Initial Portfolio. The obligations of Genesis Funding under these notes will be secured by its ownership interests in subsidiaries that own the aircraft in our Initial Portfolio and by the leases relating to those aircraft. A description of the securitization is set forth under ‘‘Description of Indebtedness — Securitization.’’

The purchase price for our Initial Portfolio will equal the sum of the net proceeds of this offering, our private placement of 3,450,000 shares to GE and the securitization, less the portion of such proceeds to be used to fund our formation and offering-related expenses, up-front costs and expenses related to our securitization, and a cash balance that we will retain for general corporate purposes. If the underwriters exercise their over-allotment option, the net proceeds from the sale of those shares and the private placement of additional shares to GE will be retained by us as additional working capital and will not increase the total purchase price. See ‘‘Use of Proceeds.’’ Based on an assumed initial public offering price of $22.00 per share, which is the midpoint of the price range set forth on the cover of this prospectus, we estimate the purchase price for our Initial Portfolio will be approximately $1,429.1 million. A description of the purchase agreement for our Initial Portfolio is set forth under ‘‘Asset Purchase Agreement.’’

In connection with this offering, our subsidiary, Genesis Acquisition Limited, has received a commitment for a $1 billion senior secured revolving credit facility that will be used to finance the acquisition of additional aircraft. A description of the credit facility is set forth under ‘‘Description of Indebtedness — Credit Facility.’’

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The following diagram summarizes our corporate structure immediately after the completion of this offering:

* Genesis Lease Limited will own 100% of Genesis Funding's Class A common stock. For purposes of the securitization, a charitable trust will hold shares of Class B common stock of Genesis Funding having limited voting rights and representing less than 0.001% of the economic interest in Genesis Funding. See ‘‘Description of Indebtedness — Securitization.’’

Corporate Information

We are a Bermuda exempted company incorporated on July 17, 2006 under the provisions of Section 14 of the Companies Act 1981 of Bermuda. All of our outstanding common shares are currently owned by Codan Trust Company Limited, in its capacity as trustee for a Bermuda purpose trust. The purpose trust was formed at the direction of GECAS for the purpose of organizing Genesis and holding our outstanding shares until we complete this offering. We will repurchase those shares for their aggregate par value of $12,000 upon the completion of this offering. Our registered office is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

Although we, Genesis Funding and Genesis Acquisition are organized under the laws of Bermuda, we and they will be resident in Ireland for Irish tax purposes and thus will be subject to Irish corporation tax on our and their income in the same way, and to the same extent, as if we and they were organized under the laws of Ireland. Our principal executive offices are located at Roselawn House, University Business Complex, National Technology Park, Limerick, Ireland. Our telephone number at that address is +353 61 633 333. Our agent for service of process in the United States is Puglisi & Associates located at 850 Library Avenue, Suite 204, Newark, Delaware 19711.

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The Offering

Issuer Genesis Lease Limited.
Securities offered 27,860,000 shares in the form of ADSs. Our common shares are being offered only in the form of ADSs.
Over-allotment option 4,179,000 shares in the form of ADSs.
GE investment An affiliate of GE has agreed to purchase from us, in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act of 1933 that will be consummated concurrently with this offering, 3,450,000 ADSs at a price per share equal to the initial public offering price. If the underwriters exercise their option to purchase additional ADSs to cover over-allotments, the affiliate of GE has agreed to purchase from us, as part of the private placement, an additional number of ADSs such that, following such exercise and purchase, it will continue to hold approximately 11% of the issued and outstanding ADSs. In addition to a 180-day lock-up applicable to all of the ADSs held by GE to which it has agreed with the representatives of the underwriters, GE has agreed with us not to sell or transfer 2,000,000 of these ADSs for a period of two years from the date of this prospectus.
Shares issued and outstanding immediately after this offering 31,310,000 shares (or 36,006,500 shares if the underwriters exercise their over-allotment option in full and GE purchases additional shares as described above).
Use of proceeds We expect to use the net proceeds of this offering primarily to pay a portion of the purchase price for our Initial Portfolio.
The purchase price for our Initial Portfolio that will be the initial assets of our aircraft leasing business will be determined based upon the initial public offering price in this offering, and will not be based upon a valuation of such assets. The purchase price will be equal to the sum of:
net proceeds from this offering after deducting the underwriters’ discounts and commissions (estimated at $580.7 million), plus
proceeds from the sale of shares to GE in the concurrent private placement (estimated at $75.9 million), plus
net proceeds of $804.5 million from the securitization, after deducting the initial purchasers' discount and fees, minus
$12.0 million to pay expenses related to our formation, this offering and the securitization, minus
a $20.0 million cash balance that we will retain for general corporate purposes.

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Assuming an initial public offering price of $22.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, we estimate that the purchase price for our Initial Portfolio will be $1,429.1 million.
If the underwriters exercise their over-allotment option, the net proceeds from the sale of those shares and the additional shares sold to an affiliate of GE in the private placement will be used for general corporate purposes, which may include the purchase of additional aircraft.
Dividend policy Our board of directors has adopted a policy to pay a regular quarterly cash dividend to our shareholders in an initial amount of $0.47 per share. We intend to pay a larger first dividend for the period from the completion of this offering to March 31, 2007.
The declaration and payment of future dividends to our shareholders will be at the discretion of our board of directors and will depend on many factors, including our financial condition, cash flows, legal requirements and other factors our board of directors deems relevant. Please review ‘‘Dividend Policy — Possible Changes in Quarterly Dividends’’ and ‘‘Risk Factors’’ for a discussion of these factors.
U.S. Tax Considerations U.S. holders of our shares will be subject to U.S. tax on any taxable income attributable to holding our shares or gain from the sale of our shares. For U.S. federal income tax purposes, we will be treated as a passive foreign investment company, or PFIC. Under the PFIC rules, a U.S. holder who disposes or is deemed to dispose of our shares at a gain, or who receives or is deemed to receive certain distributions with respect to our shares, generally will be required to treat such gain or distributions as ordinary income and to pay an interest charge on the tax imposed. A qualified electing fund, or QEF, election may be used to reduce or eliminate the adverse impact of the PFIC rules for holders of our shares. This election may accelerate the recognition of taxable income and may result in the recognition of ordinary income. In addition, our distributions will not qualify for the reduced rate of U.S. federal income tax that applies to qualified dividends paid to non-corporate U.S. taxpayers. Investors should consult with their own tax advisors as to whether or not to make such an election and should carefully review the information under the heading ‘‘Taxation Considerations — U.S. Federal Income Tax Considerations.’’
Provided you make a QEF election, we estimate that if you hold the shares that you purchase in this offering through December 31, 2008, you will be allocated, on a cumulative basis, an amount of U.S. federal taxable income

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for such period that will be less than 37.5% of the cash distributions paid to you during such period. We expect that substantially all of this income will be allocable to 2007, and very little or none of this income will be allocable to 2008. Although we have estimated that if you make a QEF election the taxable income allocated to you initially will be less than anticipated distributions, if we do not acquire additional aircraft generating sufficient depreciation deductions for U.S. tax purposes, your share of taxable income will likely exceed cash distributions at some point in the future. Please review ‘‘Tax Considerations — U.S. Federal Income Tax Considerations’’ for the basis of this estimate.
ADSs Each ADS represents one common share. The depositary will be Deutsche Bank Trust Company Americas. The ADSs will be evidenced by American Depositary Receipts, or ADRs. The depositary through its custodian will hold the common shares underlying your ADSs. You will have rights as provided in the deposit agreement. The depositary will pay you the cash dividends and other distributions it receives on our common shares, in accordance with the terms of the deposit agreement, subject to any withholding taxes and any other applicable laws and regulations. We are offering our common shares only in the form of ADSs to facilitate the use by U.S. resident shareholders of an exemption from Irish withholding taxes available to U.S. residents. For a description of Irish withholding taxes and available exemptions for holders resident in the United States and other tax-treaty countries, you should review ‘‘Taxation Considerations — Irish Tax Considerations — Irish Dividend Withholding Tax.’’ We will pay all fees of the depositary, except in connection with cancellations of ADSs and withdrawal of common shares. For a description of the ADSs, you should review ‘‘Description of American Depositary Shares’’ in this prospectus.
Listing Our ADSs have been approved for listing on the New York Stock Exchange, subject to official notice of issuance, under the symbol ‘‘GLS.’’
Corporate Tax Residency We and certain of our subsidiaries will be resident in Ireland for Irish tax purposes and thus subject to Irish corporation tax on our and their income in the same way, and to the same extent, as if we and they were organized under the laws of Ireland.
Conditions Precedent Completion of this offering is conditioned upon completion of the securitization and the private placement of shares to GE.

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Risk Factors Investing in our shares involves a high degree of risk. You should carefully read and consider the information set forth under the heading ‘‘Risk Factors’’ and all other information set forth in this prospectus before investing in our shares.

Unless the context otherwise requires, all information in this prospectus:

•  reflects the acquisition of our Initial Portfolio, as described above under ‘‘— Our Formation;’’
•  assumes an initial public offering price of $22.00 per share, the midpoint of the price range set forth on the cover page of this prospectus;
•  assumes the underwriters do not exercise their over-allotment option; and
•  excludes approximately 33,640 restricted shares to be issued to our directors and officers prior to the completion of this offering.

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Summary Historical Combined and Pro Forma Financial and Other Data

The following table presents summary historical combined and pro forma financial and other data of our predecessor, which reflect the combination of the aircraft included in our Initial Portfolio and related leases as owned and operated by affiliates of GE during each of the periods presented. Our predecessor combined financial statements reflect the results of each of these aircraft and the related leases from the date that each such aircraft was acquired by an affiliate of GE.

The summary historical combined financial data presented below for each of the three years in the period ended December 31, 2005 have been derived from the audited combined financial statements of our predecessor included elsewhere in this prospectus. The summary historical combined financial data presented below for each of the nine-month periods ended September 30, 2005 and 2006 have been derived from the unaudited condensed combined financial statements of our predecessor included elsewhere in this prospectus, which have been prepared on a basis consistent with the predecessor's audited combined financial statements. Our predecessor’s combined financial statements have been prepared on a carve-out basis and do not reflect what our results of operations, financial position and cash flows would have been had we operated as a separate, stand-alone company during the periods presented, or what our results of operations, financial position and cash flows will be in the future. Instead, this financial information represents the combination of results attributable to the aircraft included in our Initial Portfolio as owned, managed, financed and operated by GE and its affiliates.

The unaudited pro forma information set forth below reflects our predecessor historical combined financial information, as adjusted to give effect to the following transactions as if each had occurred as of the assumed dates:

•  the issuance and sale of 27,860,000 shares to the public at an assumed initial public offering price of $22.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, resulting in gross proceeds to us of $612.9 million and net proceeds of $580.7 million after deducting the underwriters' discounts and commissions;
•  the issuance and sale of 3,450,000 shares to GE in the concurrent private placement at a price per share of $22.00, resulting in gross proceeds to us of $75.9 million;
•  the issuance of $810.0 million of aircraft lease-backed notes in the securitization for net proceeds of $804.5 million after deducting the initial purchasers' discounts and fees;
•  the use of $2.9 million to fund our portion of the expenses related to this offering and the private placement of shares to GE;
•  the use of $9.1 million to fund our portion of the expenses related to the securitization;
•  the use of $1,429.1 million to purchase the 41 aircraft in our Initial Portfolio; and
•  the retention of a $20.0 million cash balance by us for general corporate purposes.

The unaudited pro forma statements have been prepared based upon available information and assumptions that we believe are reasonable. However, the unaudited pro forma financial statements are presented for illustrative and informational purposes only and should not be considered indicative of actual results that would have been achieved had the transactions described above actually been consummated as of the assumed dates. The unaudited pro forma statements also should not be considered representative of our future financial condition or results of operations.

The following data should be read in conjunction with ‘‘Risk Factors,’’ ‘‘Use of Proceeds,’’ ‘‘Unaudited Pro Forma Financial Statements,’’ ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations,’’ and the combined financial statements of our predecessor company.

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  Historical Pro Forma
  Years Ended December 31, Nine Months
Ended September 30,
Year Ended
December 31,
2005
Nine Months
Ended
September 30,
2006
  2003 2004 2005 2005 2006
        (Dollars in thousands)    
Statement of income data:  
 
 
 
 
 
 
Revenues  
 
 
 
 
 
 
Rental of flight equipment $       80,118
$       99,414
$     117,861
$ 86,989
$ 111,603
$   159,801
$   125,297
Expenses  
 
 
 
 
 
 
Depreciation of flight equipment 29,321
35,005
42,462
30,611
37,396
57,684
43,842
Interest 25,700
28,680
34,995
25,232
33,161
48,893
36,670
Maintenance expense 48
1,019
1,989
264
3,819
1,989
3,819
Selling, general and administrative –
related-party
1,283
2,400
3,144
2,688
2,724
12,770
9,943
Total operating expenses 56,352
67,104
82,590
58,795
77,100
121,336
94,274
Income before taxes 23,766
32,310
35,271
28,194
34,503
38,465
31,023
Provision for income taxes 7,328
14,892
13,900
11,291
12,791
4,808
3,878
Net income $ 16,438
$ 17,418
$ 21,371
$ 16,903
$ 21,712
$ 33,657
$ 27,145
Other data:  
 
 
 
 
 
 
Net cash provided by operating activities $ 65,733
$ 85,525
$ 73,702
$ 53,681
$ 76,304
 
 
Net cash used in investing activities (168,136
)
(178,756
)
(186,713
)
(130,622
)
(137,341
)
 
 
Net cash provided by financing activities 102,403
93,231
113,011
76,941
61,037
 
 
EBITDA(1) $ 79,094
$ 96,571
$ 113,493
$ 84,652
$ 105,541
$ 145,807
$ 112,016
Number of aircraft (at end of period) 25
31
37
34
40
41
41
Number of lessees (at end of period) 17
22
28
26
30
30
30
(1) EBITDA is a measure of operating performance and liquidity that is not calculated in accordance with U.S. generally accepted accounting principles, or GAAP. We define EBITDA as net income before provision for income taxes, interest and depreciation and amortization. EBITDA is a key measure of our operating performance and liquidity that management uses to focus on consolidated operating results exclusive of expenses that relate to the financing and capitalization of our business. Our management uses EBITDA as a financial measure to evaluate the consolidated financial and operating performance and liquidity of our business that, when viewed with our GAAP results and the following reconciliation, we believe provides a more complete understanding of factors and trends affecting our business than GAAP measures alone. EBITDA assists us in comparing our operating performance on a consistent basis as it removes the impact of our capital structure (primarily interest charges), asset base (primarily depreciation and amortization) and items outside the control of our management team (taxes) from our operating results. EBITDA also assists us in comparing our liquidity on a consistent basis by providing a measure to demonstrate cash flow available for the payment of interest and dividends. We also present EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance and of debt service and dividend paying capacity. Accordingly, EBITDA is one of the metrics used by management and our board of directors to review the financial performance and liquidity of our business.
EBITDA should not be considered a substitute for net income, income from operations or cash flows provided by or used in operations, as determined in accordance with GAAP. In evaluating EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments described above. In particular, we expect that depreciation of flight equipment and interest expense will continue to represent the substantial portion of our operating expenses. Therefore, the use of EBITDA as a measure of operating performance and liquidity is limited by

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the exclusion of a majority of our operating expenses from the measure. Our presentation of EBITDA should not be construed as an implication that our future results will be unaffected by expenses that are unusual, non-routine or non-recurring items.
EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
EBITDA does not reflect our cash expenditures for capital expenditures or contractual commitments;
EBITDA does not reflect changes in, or cash requirements for, our working capital requirements;
EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA does not reflect cash requirements for such replacements; and
other companies may calculate EBITDA differently, which limits the usefulness of EBITDA as a comparative measure.
Because of these limitations, EBITDA should not be considered as the sole measure of the operating performance or liquidity of our business. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA only supplementally. We strongly urge you to review the GAAP financial measures included in this prospectus, our predecessor's consolidated financial statements, including the notes thereto, our pro forma financial statements, and the other financial information contained in this prospectus, and to not rely on any single financial measure to evaluate our business.
The table below shows the reconciliation of net income to EBITDA for the years ended December 31, 2003, 2004 and 2005 and the nine months ended September 30, 2005 and 2006:

  Historical Pro Forma
  Years Ended December 31, Nine Months
Ended September 30,
Year Ended
December 31,
2005
Nine Months
Ended
September 30,
2006
  2003 2004 2005 2005 2006
        (Dollars in thousands)    
Net income $   16,438
$   17,418
$ 21,371
$ 16,903
$ 21,712
$ 33,657
$ 27,145
Provision for income taxes 7,328
14,892
13,900
11,291
12,791
4,808
3,878
Interest 25,700
28,680
34,995
25,232
33,161
48,893
36,670
Depreciation and amortization 29,628
35,581
43,227
31,226
37,877
58,449
44,323
EBITDA $ 79,094
$ 96,571
$ 113,493
$ 84,652
$ 105,541
$ 145,807
$ 112,016

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The table below shows the reconciliation of net cash provided by operating activities to EBITDA for the years ended December 31, 2003, 2004 and 2005 and the nine months ended September 30, 2005 and 2006:

  Historical Pro Forma
  Years Ended December 31, Nine Months
Ended September 30,
Year Ended
December 31,
2005
Nine Months
Ended
September 30,
2006
  2003 2004 2005 2005 2006
Net cash provided by
operating activities
$ 65,733
$ 85,525
$ 73,702
$ 53,681
$ 76,304
$ 106,255
$ 68,380
Interest expense 25,700
28,680
34,995
25,232
33,161
48,893
36,670
Income taxes, net of changes in deferred income taxes (13,093
)
(12,010
)
16,053
14,468
2,287
10,201
Non-cash operating expenses (1,283
)
(2,400
)
(2,806
)
(2,437
)
(2,691
)
(400
)
(300
)
Net changes in operating assets and liabilities 2,037
(3,224
)
(8,451
)
(6,292
)
(3,520
)
(8,941
)
(2,935
)
EBITDA $ 79,094
$ 96,571
$ 113,493
$ 84,652
$ 105,541
$ 145,807
$ 112,016

    

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RISK FACTORS

Investing in our shares involves a high degree of risk. You should carefully consider the following risks, as well as the other information contained in this prospectus, before making an investment in our company. The risks discussed below could materially and adversely affect our business, prospects, financial condition, results of operations, cash flows and ability to pay dividends and cause the trading price of our shares to decline. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, prospects, financial condition, results of operations, cash flows and ability to pay dividends. You may lose all or a part of your investment.

Risks Related to Our Financial Information

We have no independent operating history upon which to assess our prospects or ability to pay dividends to our shareholders.

We are a newly organized company with no independent operating history, and our prospects and ability to pay dividends must be considered in light of the risks, expenses and difficulties frequently encountered when any new business is formed. Our lack of independent operating history will make it difficult for investors to assess the quality of our management and our ability to operate profitably and pay dividends to our shareholders. The historical and pro forma financial information included in this prospectus does not reflect the financial condition, results of operations or cash flows we would have achieved during the periods presented as a stand-alone company, and therefore may not be a reliable indicator of our future financial performance or ability to pay dividends. We cannot assure you that we will be able to implement our business strategies, that any of our strategies will be achieved or that we will be able to operate profitably and pay regular dividends to our shareholders. We urge you to carefully consider the basis on which the historical and pro forma financial information included in this prospectus was prepared and presented.

The historical and pro forma financial information included in this prospectus does not reflect the financial condition, results of operations or cash flows we would have achieved during the periods presented as a stand-alone company, and therefore may not be a reliable indicator of our future financial performance or ability to pay dividends.

The historical combined and pro forma financial information included in this prospectus does not reflect the financial condition, results of operations or cash flows that we would have achieved as a stand-alone company during the periods presented or that we will achieve in the future. This is primarily a result of the following factors:

•  The historical combined financial information included in this prospectus does not reflect our ongoing cost structure, management, financing costs or business operations. Instead, this financial information represents the combination of results attributable to some of the aircraft included in our Initial Portfolio as owned, managed, financed and operated by GECAS and its affiliates. Changes will occur in the cost, financing and operation of these aircraft after we acquire them. These changes are likely to include:
•  the incurrence of stand-alone costs for services previously provided by GE and its affiliates;
•  the need for additional personnel and service providers to perform services currently provided by GECAS and other affiliates of GE;
•  legal, accounting, compliance and other costs associated with being a public company with listed equity, including compliance with the Sarbanes-Oxley Act of 2002 and rules subsequently implemented by the Securities and Exchange Commission, or the SEC, and the New York Stock Exchange, or the NYSE; and
•  the fact that the historical combined financial information reflects only the number of aircraft included in our Initial Portfolio owned by affiliates of GE for the periods or as of the dates specified therein, rather than all 41 of the aircraft included in our Initial Portfolio.

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•  The historical financial information reflects allocations of corporate expenses from affiliates of GE and GECAS to our Initial Portfolio. These allocations are different from the comparable expenses we will incur as a stand-alone public company due to a number of factors, including the likelihood that we will not be able to realize economies-of-scale and negotiating leverage achieved by GE and GECAS.
•  Our predecessor’s working capital requirements were satisfied as part of GE’s corporate-wide cash management policies. Although we will have access to a credit facility for the acquisition of additional aircraft, we will not be able to obtain financing on terms as favorable as our predecessor obtained from or through GE and our cost of debt will be higher.
•  We expect that depreciation of capitalized major maintenance costs and our maintenance expenses will be higher in future periods than reflected in the historical and pro forma financial information due to the aging of the aircraft in our Initial Portfolio.
•  The pro forma financial information gives effect to this offering, the securitization, the concurrent private placement to GE and the application of the proceeds from these transactions as described under ‘‘Use of Proceeds,’’ including the purchase of the aircraft in our Initial Portfolio, as if those transactions were already consummated. This pro forma financial information has been prepared based upon available information and estimates and assumptions that we believe are reasonable. However, this pro forma financial information is presented for illustrative and informational purposes only and is not intended to represent or indicate what our financial condition or results of operations would have been had those transactions occurred as of those dates, nor what they may be in the future.
•  We expect that our effective tax rate will be lower than our predecessor's as a result of our tax residency in Ireland. We also expect that our cash tax payments will be lower as a result of our ability to depreciate aircraft under Irish tax law over eight years, which is a more accelerated rate than our predecessor used to depreciate aircraft under U.S. tax law.

Our subsidiaries in many cases have owned the aircraft prior to our acquisition of them and may have unknown contingent liabilities that we may be required to fund.

There is a risk that our subsidiaries, many of which have owned the aircraft in our Initial Portfolio prior to our acquisition of such subsidiaries, could have material contingent liabilities that are unknown to us and that were incurred by third parties from operating and leasing the aircraft in our Initial Portfolio or for other reasons.

Affiliates of GE, from which we will acquire our Initial Portfolio, will make representations and warranties relating to:

•  the existence of a valid and final transfer of the beneficial interests of entities that hold the aircraft or entities that hold the beneficial interests of any such entities and that are sold to us by affiliates of GE;
•  the title of our aircraft-owning subsidiaries to the applicable aircraft; and
•  the lack of additional liabilities of our aircraft-owning subsidiaries or liens on the aircraft other than disclosed to us.

These representation and warranties are subject to time limits. If a liability arises and we are called on to pay it but are not able to recover any amount from the sellers for such liability, our liquidity could decrease significantly and we may be unable to pay dividends to our shareholders.

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Risks Related to Our Dividend Policy

We may not be able to pay or maintain dividends on our shares. The failure to do so would adversely affect the trading price of our shares.

There are a number of factors that could affect our ability to pay dividends. If we are not able to refinance the notes issued in the securitization before the principal begins to amortize, our ability to pay dividends will be adversely affected if we have not developed sufficient additional sources of cash flow by then to replace the cash flows that will be applied to such principal payments. Commencing after the end of the fifth year after the issuance of the notes in the securitization, we will be required to apply all available cash flow from our Initial Portfolio to repay the principal amount thereof on a monthly basis, and commencing after the end of the third year after such issuance, we will be required to repay $1,000,000 of the principal of the notes on a monthly basis. Other factors that may cause you not to receive dividends in the expected amounts or at all, include the following:

•  lack of availability of cash to pay dividends due to changes in our operating cash flow, capital expenditure requirements, working capital requirements and other cash needs;
•  our inability to make acquisitions of additional aircraft that are accretive to cash flow;
•  application of funds to make and finance acquisitions of aircraft and other aviation assets;
•  reduced levels of demand for, or value of, our aircraft;
•  increased supply of aircraft;
•  obsolescence of aircraft;
•  lower lease rates on new aircraft and re-leased aircraft;
•  delays in re-leasing our aircraft after the expiration or early termination of existing leases;
•  impaired financial condition and liquidity of our lessees;
•  deterioration of economic conditions in the commercial aviation industry generally;
•  unexpected or increased fees and expenses payable under our agreements with GECAS and its affiliates and other service providers;
•  poor performance by GECAS and its affiliates and other service providers and our limited rights to terminate them;
•  unexpected or increased maintenance, operating or other expenses or changes in the timing thereof;
•  a decision by our board of directors to modify or revoke its policy to distribute a portion of our cash flow available for distribution;
•  restrictions imposed by our financing arrangements, including under the notes issued in the securitization, our credit facility and any indebtedness incurred in the future to refinance our existing debt or to expand our aircraft portfolio;
•  changes in Irish tax law, the tax treaty between the United States and Ireland (the ‘‘Irish Treaty’’) or our ability to qualify for the benefits of such treaty;
•  cash reserves established by our board of directors;
•  restrictions under Bermuda law on the amount of dividends that we may pay: and
•  the other risks discussed under ‘‘Risk Factors.’’

The failure to maintain or pay dividends would adversely affect the trading price of our shares. See ‘‘Dividend Policy.’’

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We are a holding company and will initially rely on Genesis Funding and its subsidiaries, the owners of the aircraft in our Initial Portfolio, to provide us with funds necessary to meet our financial obligations and pay dividends.

We are a holding company and our principal asset is the equity interest we hold in Genesis Funding, which will own, through its subsidiaries, the aircraft in our Initial Portfolio. As a result, we will depend on loans, dividends and other payments from Genesis Funding and from any other subsidiaries through which we may conduct operations in the future, to generate the funds necessary to meet our financial obligations and to pay dividends on our shares. Genesis Funding is legally distinct from us and is significantly restricted from paying dividends or otherwise making funds available to us pursuant to the agreements governing the notes issued in the securitization. See ‘‘Description of Indebtedness — Securitization.’’ Any other subsidiaries through which we may conduct operations in the future will also be legally distinct from us and may be similarly restricted from paying dividends or otherwise making funds available to us under certain conditions. Our subsidiaries will generally be required to service their debt obligations before making distributions to us, thereby reducing the amount of our cash flow available to pay dividends, fund working capital, make capital expenditures and satisfy other needs. In addition, our rights to the aircraft owned by Genesis Funding and our other subsidiaries will be structurally subordinated to the rights of the creditors of Genesis Funding. This means that the creditors of Genesis Funding and of our other subsidiaries will be paid from their assets before we would have any claims to those assets.

Other Risks Related to Our Business

Unforeseen difficulties and costs associated with the acquisition and/or management of our aircraft portfolio and other aviation assets could reduce or prevent our future growth and profitability.

Our growth strategy contemplates future acquisitions and leasing of additional commercial aircraft and other aviation assets. There is currently high market demand for certain narrow-body aircraft, and we may encounter difficulties in acquiring aircraft on favorable terms or at all, including increased competition for assets, which could reduce our acquisition opportunities or cause us to pay higher prices. Any acquisition of aircraft or other aviation assets may not be profitable to us after the acquisition and may not generate sufficient cash flow to justify our investment. In addition, our acquisition growth strategy exposes us to risks that may harm our business, financial condition, results of operations and cash flows, including risks that we may:

•  fail to realize anticipated benefits, such as new customer relationships or cash flow enhancements;
•  impair our liquidity by using a significant portion of our available cash or borrowing capacity to finance acquisitions;
•  significantly increase our interest expense and financial leverage to the extent we incur additional debt to finance acquisitions;
•  incur or assume unanticipated liabilities, losses or costs associated with the aircraft or other aviation assets that we acquire;
•  incur other significant charges, including asset impairment or restructuring charges; or
•  be unable to maintain our ability to pay regular dividends to our shareholders.

Unlike new aircraft, existing aircraft typically do not carry warranties as to their conditions. Although we may inspect an existing aircraft and its documented maintenance, usage, lease and other records prior to acquisition, such an inspection normally would not provide us with as much knowledge of an aircraft’s condition as we would have if it had been built for us. Repairs and maintenance costs for existing aircraft are difficult to predict and generally increase as aircraft age and may have been adversely affected by prior use. These costs could decrease our cash flow and reduce our liquidity and our ability to pay regular dividends to our shareholders.

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We will need additional capital to finance our growth, and we may not be able to obtain it on acceptable terms, or at all, which may limit our ability to grow and compete in the aviation market.

We will require additional financing to expand our business through the acquisition of additional aircraft and other aviation assets. Financing may not be available to us or may be available to us only on terms that are not favorable. The terms of our credit facility and the securitization restrict our ability to incur additional debt. In addition, the terms of any other indebtedness we may incur may restrict our ability to incur additional debt. If we are unable to raise additional funds or obtain capital on acceptable terms, we may have to delay, modify or abandon some or all of our growth strategies.

We are a start-up company and need to establish our business infrastructure.

Our operational success will depend on succesfully establishing the business infrastructure, policies, procedures and systems necessary to support and grow our business. We may encounter difficulties and delays in establishing our business infrastructure, policies, procedures and systems and in integrating third-party service providers, which may affect our ability to meet reporting and other compliance requirements and to make payments on our debt in a timely manner. This may harm our business, financial condition, results of operations and cash flows and may delay or reduce our future growth and profitability.

The death, incapacity or departure of senior management could harm our business and financial results.

Our future success depends to a significant extent upon our chief executive officer, John McMahon, and our chief financial officer, Alan Jenkins. Mr. McMahon has substantial experience in the aviation industry, and his continued employment is crucial to the development of our business strategy and to the growth and development of our business. Mr. Jenkins also has significant experience in the aviation leasing industry on which we will depend. If Mr. McMahon or Mr. Jenkins were to die, become incapacitated for a short or long period, or leave our company, we may not be able to replace him with another chief executive officer or chief financial officer with equivalent talent and experience, and our business, prospects, financial condition, results of operations and cash flows may suffer. Because we have such a limited staff, the impact of either Mr. McMahon’s or Mr. Jenkins's departure could be severe to our business.

We will become subject to financial and other reporting and corporate governance requirements that may be difficult for us to satisfy.

In connection with this offering we will become obligated to file with the SEC periodic reports that are specified in Section 13 of the Securities Exchange Act of 1934, and we will be required to ensure that we have the ability to prepare financial statements that are fully compliant with all SEC reporting requirements on a timely basis. Upon completion of this offering, we will also become subject to requirements of the NYSE and certain provisions of the Sarbanes-Oxley Act of 2002 and the regulations promulgated thereunder, which will impose significant compliance obligations upon us. Pursuant to such obligations we will be required to, among other things:

•  prepare periodic reports, including financial statements, in compliance with our obligations under U.S. federal securities laws and NYSE rules;
•  maintain effective internal controls over financial reporting and disclosure controls and procedures;
•  establish an investor relations function; and
•  establish internal compliance policies, such as those relating to insider trading.

We may not be successful in implementing these requirements. If we fail to implement the requirements with respect to our internal accounting and audit functions, our ability to report our operating results on a timely and accurate basis could be impaired.

We have retained AIB International Financial Services Limited, or AIBIFS, as a corporate services provider to assist us in establishing books of account and in preparing our quarterly and annual consolidated financial statements. AIBIFS has informed us that they have not previously

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provided these services to a company like ours that prepares its consolidated financial statements under U.S. GAAP and is subject to SEC public company requirements, including the reporting and other requirements of the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002. We will retain Ernst & Young LLP to provide training and assistance regarding U.S. GAAP and SEC reporting requirements including the requirements of the Sarbanes-Oxley Act of 2002. If, due to lack of experience or otherwise, AIBIFS does not adequately perform such services and we are unable to remedy such inadequacy ourselves or through other service providers, our financial statements could contain material misstatements or omissions, we could have material weaknesses in our internal controls over financial reporting and our financial statements may not be published in a timely fashion, any of which could cause investors to lose confidence in our financial reporting and have an adverse effect on the trading price of our shares.

Risks Related to Our Indebtedness

We may not be able to refinance the notes issued by Genesis Funding on favorable terms or at all, which may require us to seek more costly or dilutive financing for our investments or to liquidate assets.

We currently intend to refinance the notes issued by Genesis Funding in the securitization through a further securitization or other long-term financing prior to the date five years after the completion of this offering after which we will be required to apply all of the available cash flow from our Initial Portfolio to repay the principal thereon. We bear the risk that we will not be able to refinance our existing indebtedness on favorable terms or at all. The inability to refinance our securitization indebtedness may require us to seek more costly or dilutive financing for our aircraft or to liquidate assets. If we are not able to refinance the notes issued in the securitization before being required to apply all of the available cash flow from our Initial Portfolio to repay the principal thereon and, as a result, excess cash available for dividends from Genesis Funding is eliminated, then our ability to continue paying dividends to our shareholders will be adversely affected if we have not developed sufficient additional sources of cash flow to replace the cash flows that will be applied to such principal amortization.

We are subject to risks related to our indebtedness that may limit our operational flexibility and our ability to pay dividends on our shares.

The terms of the notes that Genesis Funding will issue in the securitization subject us to certain risks and operational restrictions, including:

•  all the aircraft leases in our Initial Portfolio and several of our aircraft serve as collateral for the notes issued in the securitization, the terms of which restrict our ability to sell aircraft and require us to use proceeds from sales of aircraft, in part, to repay amounts outstanding under those notes;
•  we will be required to dedicate a significant portion of our cash flow from operations to debt service payments, thereby reducing the amount of our cash flow available to pay dividends, fund working capital, make capital expenditures and satisfy other needs;
•  restrictions on Genesis Funding’s or other subsidiaries' ability to distribute excess cash flow to us under certain circumstances;
•  lessee, geographical and other concentration limits on flexibility in leasing our aircraft;
•  requirements to obtain policy provider consents and rating agency confirmations for certain actions; and
•  restrictions on Genesis Funding's ability to incur additional debt, create liens on assets, sell assets, make freighter conversions and make certain investments or capital expenditures.

The restrictions described above may impair our ability to operate and to compete effectively with our competitors. Similar restrictions may be contained in the terms of future financings that we may enter into to finance our growth, including our committed credit facility.

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The terms of the notes issued in the securitization will require us to apply funds otherwise available for paying dividends to the repayment of such notes commencing after the end of the fifth year after consummation of this offering. Additionally, if Genesis Funding does not satisfy a debt service coverage ratio for two consecutive months between the 35th and 59th months after consummation of this offering, Genesis Funding will be required to apply funds otherwise available for paying dividends to the retirement of the securitization notes.

Commencing after the end of the fifth year after consummation of this offering, Genesis Funding will be required to apply all of its available cash flow to repay the principal of the securitization notes. If Genesis Funding's debt service coverage ratio (as defined in the indenture for the securitization notes) is less than 1.80 to 1.00 on any two consecutive monthly payment dates occurring between the 35th and 59th month after consummation of this offering, Genesis Funding will be required to apply all of its available cash flow to repay the principal of the securitization notes. If Genesis Funding has not refinanced the notes prior to being required to apply all available cash flow to repay the principal amount of the notes, then the cash flow from the aircraft in our Initial Portfolio will not be available to us to pay dividends or to finance acquisitions of additional aircraft.

Genesis Funding's notes will be subject to interest rate risk, which could impair its ability to make distributions to us and our ability to pay dividends to you.

The notes that Genesis Funding will issue in the securitization will have a floating interest rate, which will subject Genesis Funding to the risk of an increase in interest rates and to the risk that its cash flow may be insufficient to make scheduled interest payments on its notes if interest rates were to increase. To limit this risk and to maintain the ratings of its notes, Genesis Funding has entered into interest rate swaps or other interest rate hedging arrangements with one or more counterparties. If any counterparty were to default on its obligations, then a mismatch in the floating rate interest obligations and fixed rate lease payments may arise, which could impair Genesis Funding's ability to make distributions to us, which would, in turn, adversely affect our ability to meet our financial obligations and pay dividends to our shareholders.

Risks Related to Our Relationships with GECAS, Its Affiliates and Other Service Providers

We will depend on GECAS to service our Initial Portfolio and additional aircraft that we acquire in the future.

We are a newly formed company with no employees other than our chief executive officer and our chief financial officer. Our business strategy involves outsourcing our servicing and remarketing of aircraft to GECAS. Our initial business operations will consist of owning and leasing a portfolio of aircraft acquired from affiliates of GE. These aircraft assets were previously owned, managed and leased by GE and its affiliates as part of their larger aircraft leasing enterprise. We will not have the same infrastructure as GECAS to support these aircraft assets and will continue to rely on GECAS for the servicing of our aircraft. Pursuant to our servicing agreements, GECAS will provide us with a variety of services, including collecting rents and other payments from the lessees of our aircraft, monitoring maintenance, insurance and other obligations under our leases, enforcing rights against lessees, remarketing aircraft for re-lease or sale and other aircraft-related services. GECAS will have a high level of autonomy in its servicing of our aircraft, and our operational success, revenues, aircraft and lease related costs and ability to execute our growth strategy will depend significantly on GECAS’s satisfactory performance of these services. GECAS’s failure to perform these services satisfactorily would significantly impair our ability to maximize our lease or sale income, monitor our lessees' compliance with their lease obligations and/or comply with our contractual obligations under our leases. Our rights to terminate the servicing agreements are limited. In particular, we have no right to terminate GECAS as servicer simply because it is performing unsatisfactorily. See ‘‘—Even if we are dissatisfied with GECAS's performance, there are only limited circumstances under which we will be able to terminate the servicing agreements and we may not terminate the servicing agreement for our Initial Portfolio without the prior written consent of the policy provider.’’

GECAS is not obligated to service all aircraft that we acquire in the future. The servicing agreements provide that GECAS may decline to accept newly acquired aircraft for servicing for a

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number of specified reasons. See ‘‘Servicing Agreements.’’ If GECAS declines to service any aircraft we acquire in the future, we will need to find a replacement servicer for such aircraft. The quality of any replacement services may not be as high or provided on terms as favorable as the terms currently offered by GECAS.

In addition, if any of the servicing agreements were to be terminated, or if their terms were to be altered, we will not be entitled to benefit from certain terms of the leases, such as cross-defaults and various insurance terms, that apply only if GECAS is the servicer, and we may not be able to replace these services promptly. If we are unable to maintain a strong, positive relationship with GECAS, our business, financial condition, results of operations and cash flows could be materially and adversely affected.

GECAS's obligation to provide us with opportunities to purchase additional aircraft or other aviation assets under our business opportunities agreement is limited, and GECAS is not prevented from competing with us for such acquisitions.

We have entered into a business opportunities agreement with GECAS which we expect will lead to additional opportunities to purchase aircraft from third-party sources that GECAS encounters in its global operations, as well as certain aircraft offered to us directly by GECAS. However, GECAS generally is free to decide whether to make offers to sell aircraft to the aircraft finance industry generally, whether to sell us any aircraft that we offer to purchase and whether to provide us with access to any opportunities to purchase aircraft from other sources. Although we intend to source aircraft purchases on our own, our resources will be significantly less than those of GECAS. Competition from GECAS or the ability of other parties to negotiate more favorable terms with GECAS or other sources of opportunities presented to us may adversely affect our business and growth prospects. See ‘‘Business Opportunities Agreement.’’

GECAS and its affiliates may have conflicts of interest with us, and their limited contractual or other duties may not restrict them from favoring their own business interests to our detriment.

Conflicts of interest may arise between us and GECAS, as the servicer for our aircraft, with respect to our operations and business opportunities. These conflicts may arise because GECAS manages and remarkets for lease or sale aircraft for us, itself, its affiliates and for many other entities. In addition, GECAS also will have extensive information about our business and operations as a result of the continued servicing of our aircraft, including access to sensitive competitive information such as lease and aircraft pricing, whereas we will not have access to similar information with respect to GECAS. If a conflict of interest arises as to one of our aircraft and other aircraft managed by GECAS, the servicing agreements provide that GECAS must perform the services in good faith, and, to the extent that either two or more of our particular aircraft or one of our aircraft and other aircraft managed by GECAS have substantially similar objectively identifiable characteristics that are relevant for purposes of the particular services to be performed, GECAS has agreed not to discriminate among our aircraft or between any of our aircraft and any other managed aircraft on an unreasonable basis. Nevertheless, despite these contractual undertakings, GECAS may favor its own interests and the interests of other managed entities over our interests.

Conflicts may arise, for example, when our aircraft are leased to entities that also lease other aircraft owned or managed by GECAS and decisions affecting some aircraft may have an adverse impact on others. For example, when a lessee in financial distress seeks to return some of its aircraft, GECAS will be required to decide which aircraft to accept for return and may favor its or another managed entity’s interest over ours. Conflicts also may arise when our aircraft are being marketed for re-lease or sale at a time when other aircraft owned or managed by GECAS are being similarly marketed. These conflicts may be especially pronounced when an affiliate of GECAS is providing financing for a lessee or for the marketed aircraft or where GECAS’s contractual arrangements with a third party have the effect of requiring preferential treatment for other aircraft.

Under the terms of our servicing agreements with GECAS, we are not entitled to be informed of all conflicts of interest involving GECAS and are limited in our right to replace GECAS because of conflicts of interest. Any replacement servicer may not provide the same quality of service or may not

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afford us terms as favorable as the terms currently offered by GECAS. Moreover, in certain situations we may incur duplicative servicing fees for services we obtain when there is a conflict of interest. If GECAS, as the servicer, makes a decision that is adverse to our interests, our business, financial condition, results of operations and cash flows could suffer. See ‘‘— Even if we are dissatisfied with GECAS, there are only limited circumstances under which we will be able to terminate the servicing agreements and we may not terminate the servicing agreement for our Initial Portfolio without the prior written consent of the policy provider.’’

Conflicts may also arise when GECAS decides to whom it will offer the opportunity to acquire an aircraft. Although GECAS has agreed under the business opportunities agreement to notify us of any offers that it makes to sell commercial jet aircraft to the aircraft finance industry generally, GECAS is not required to sell us any aircraft that we offer to purchase or to provide us with opportunities that become available to GECAS from other sources. Accordingly, GECAS may decide to purchase aircraft for itself or favor other managed entities that are interested in purchasing aircraft that become available from other sources. See ‘‘— GECAS's obligation to provide us with opportunities to purchase additional aircraft or other aviation assets under our business opportunities agreement is limited, and GECAS is not prevented from competing with us for such acquisitions.’’

We may compete with GECAS for acquisitions and dispositions of aircraft as well as the re-leasing of our aircraft that are not serviced by GECAS.

We may compete with GECAS in the market for aircraft acquisitions and dispositions and in re-leasing any of our aircraft that GECAS does not service. Currently, GECAS manages more than 1,400 aircraft owned by its affiliates and more than 250 aircraft owned by other entities and thus will have considerably greater scale than we will have. GECAS also will have extensive information about our business and operations as a result of the continued servicing of our aircraft, including access to sensitive competitive information such as lease and aircraft pricing, whereas we will not have access to similar information with respect to GECAS. In addition, GECAS has significantly greater financial resources than we have. As a result, we are likely to be at a competitive disadvantage to GECAS as we seek to acquire or dispose of aircraft or to re-lease any of our aircraft that GECAS does not service.

Our servicing agreements limit our remedies against GECAS for unsatisfactory performance and provide certain termination rights to the policy provider.

Under our servicing agreements with GECAS, in many cases we may not have the right to recover damages from GECAS for unsatisfactory performance. In addition, although GECAS is subject to standards of care and conflicts as provided in the servicing agreements, GECAS is not contractually responsible for:

•  the transfer of aircraft, leases or other assets to our company;
•  determining the adequacy of the terms of any aircraft lease, including rent payments or security deposits;
•  determining the reliability or creditworthiness of any lessee; or
•  our compliance with the terms of our agreements with other parties, including the indenture for the securitization and our credit facility.

We have agreed to indemnify GECAS and its affiliates for broad categories of losses arising out of the performance of services for our aircraft and leases, unless they are finally adjudicated to have been caused directly by GECAS’s gross negligence or willful misconduct (including willful misconduct that constitutes fraud) in respect of GECAS’s obligation to apply its standard of care or conflicts standard in the performance of its services. We have also agreed to indemnify GECAS and its affiliates for losses arising out of the disclosures in this prospectus (except certain disclosures provided to us by GECAS) and losses arising out of our compliance with our obligations to any holders of any securities issued by us or any of our subsidiaries or any governmental authorities.

Under certain circumstances the provider of the financial guarantee insurance policy with respect to the securitization notes has the right to terminate GECAS as the servicer for our Initial Portfolio without our consent and may terminate GECAS at a time which may be disadvantageous to us.

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Even if we are dissatisfied with GECAS's performance, there are only limited circumstances under which we will be able to terminate the servicing agreements and we may not terminate the servicing agreement for our Initial Portfolio without the prior written consent of the policy provider.

We have the right to terminate any servicing agreement with GECAS (except in the case of the servicing agreement for our Initial Portfolio, which also requires the prior written consent of the policy provider) if, among other things,

•  GECAS ceases to be at least majority-owned directly or indirectly by General Electric Capital Corporation, or GE Capital, or its ultimate parent, GE;
•  GECAS fails in any material respect to perform any material services under the servicing agreement which results in liability of GECAS due to its gross negligence or willful misconduct (including willful misconduct constituting fraud) in respect of its obligation to apply the standard of care or conflicts standard in respect of performance of the services in a manner that is materially adverse to us and our applicable subsidiaries taken as a whole;
•  GECAS fails in any material respect to perform any material services under the servicing agreement in accordance with the standard of care or the conflicts standard in a manner that is materially adverse to us and our applicable subsidiaries taken as a whole;
•  GECAS, GE Capital or GE becomes subject to bankruptcy or insolvency proceedings;
•  with respect to the master servicing agreement, we have insufficient funds for the payment of certain dividends while a significant portion of our available aircraft remain off-lease for a specified period;
•  with respect to the servicing agreement for our Initial Portfolio, we have insufficient funds for the payment of interest on the notes for a period of at least 60 days;
•  with respect to the servicing agreement for our Initial Portfolio, at least 15% of the number of aircraft assets remain off-lease but available for re-lease for a period of at least three months following specified events set forth in the trust indenture; or
•  with respect to the servicing agreement for our Initial Portfolio, without limiting GECAS's rights under the security trust agreement, GECAS takes any steps for the purpose of processing the appointment of an administrative receiver or the making of any administrative order or for instituting a bankruptcy, reorganization, arrangement, insolvency, winding up, liquidation, composition or any similar proceeding under the laws of any jurisdiction with respect to any person in the Genesis Funding, and any of its subsidiaries, or any of the aircraft assets.

In addition, in the case of the servicing agreement for our Initial Portfolio, the policy provider also will have the right to terminate such servicing agreement under the circumstances described above.

In the absence of any of these events, neither we nor the policy provider have a right to terminate any servicing agreement, even if we are or it is dissatisfied with GECAS’s performance. In addition, because of our substantial dependence on GECAS, our board of directors may be reluctant to initiate litigation against GECAS to enforce contractual rights under any servicing agreement.

GECAS may resign under any servicing agreement with respect to all aircraft serviced thereunder or any affected aircraft, as the case may be, if it reasonably determines that directions given, or services required, would, if carried out, be unlawful under applicable law, be in violation of any GE corporate policy regarding business practices or legal, ethical or social matters, be likely to lead to an investigation by any governmental authority of GECAS or its affiliates, expose GECAS to liabilities for which, in GECAS’s good faith opinion, adequate bond or indemnity has not been provided or place GECAS in a conflict of interest with respect to which, in GECAS’s good faith opinion, GECAS could not continue to perform its obligations under the servicing agreement with respect to all serviced aircraft or any affected aircraft, as the case may be (but with respect to the foregoing circumstances, GECAS may resign only with respect to the affected aircraft). Whether or not it

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resigns, GECAS is not required to take any action of the foregoing kind. GECAS may also resign if it becomes subject to taxes for which we do not indemnify GECAS. GECAS’s decision to resign under any servicing agreement would significantly impair our ability to re-lease or sell our aircraft and service our leases.

We will rely extensively on third-party service providers for certain administrative, accounting and other services.

Our only current employees are our chief executive officer and our chief financial officer. We intend to outsource certain significant administrative, accounting and other tasks to third-party service providers. We expect that these tasks will include:

•  assisting with the management of Genesis Funding and administration of the securitization;
•  providing financial information in connection with the maintenance of our accounting ledgers;
•  assisting in preparation of quarterly and annual financial statements;
•  coordinating cash management and certain other treasury functions;
•  coordinating information systems, network and related services;
•  assisting in the preparation of annual budgets;
•  assisting in the preparation of reports to investors and to the SEC;
•  arranging for the preparation of and filing all required tax returns;
•  administering payrolls;
•  assisting with investor relations; and
•  other services that we may identify in the future.

We will also rely extensively on GECAS to service our aircraft.

Our operational success and ability to execute our growth strategy will depend significantly upon the satisfactory performance of these services. Any service provider's failure to perform its obligations would harm our ability to perform the functions listed above.

The terms of our agreements with GECAS and other affiliates of GE were negotiated without independent assessment on our behalf, and these terms may be less advantageous to us than if they had been the subject of arm’s-length negotiations.

We will enter into various agreements with GECAS and other affiliates of GE that will effect the transactions relating to our formation, this offering, the securitization and the application of the proceeds from this offering and the securitization, and our ongoing operations and business. Although the pricing and other terms of these agreements were reviewed by our management and our board of directors, they were determined by GE-affiliated entities in the overall context of this offering and the related transactions. As a result, provisions of these agreements may be less favorable to us than they might have been had they been the result of arm’s-length transactions among unaffiliated third parties.

Risks Relating to Our Aircraft Portfolio

The variability of supply and demand for aircraft and other aviation assets could depress lease rates and the value of our leased assets, which would have an adverse effect on our financial results and growth prospects and on our ability to meet our debt obligations and pay dividends.

The aviation leasing and sales industry has experienced periods of aircraft oversupply and undersupply. The oversupply of a specific type of aircraft or other aviation asset in the market is likely to depress lease rates for, and the value of, that type of asset. The supply and demand for aircraft is affected by various cyclical and non-cyclical factors that are not under our control, including:

•  passenger air travel and air cargo demand;
•  geopolitical and other events, including war, acts of terrorism, outbreaks of epidemic diseases and natural disasters;

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•  operating costs, availability of jet fuel and general economic conditions affecting our lessees’ operations;
•  governmental regulation, including new airworthiness directives;
•  interest rates;
•  airline restructurings and bankruptcies;
•  cancellations of orders for aircraft;
•  delays in delivery by manufacturers:
•  availability of credit;
•  manufacturer production levels and technological innovation;
•  retirement and obsolescence of aircraft models;
•  manufacturers merging or exiting the industry or ceasing to produce aircraft or engine types;
•  accuracy of estimates relating to future supply and demand made by manufacturers and lessees;
•  reintroduction into service of aircraft or engines previously in storage; and
•  airport and air traffic control infrastructure constraints.

These factors may produce sharp decreases in asset values and achievable lease rates, which would have an impact on our cost of acquiring aircraft or other aviation assets, may result in lease defaults and could delay or prevent the aircraft or other aviation assets from being re-leased or re-leased on favorable terms, or, if desired, sold on favorable terms.

Factors that increase the risk of decline in aircraft value and achievable lease rates could have an adverse affect on our financial results and growth prospects and on our ability to meet our debt obligations and to pay dividends.

In addition to factors linked to the aviation industry generally, other factors that may affect the value and achievable lease rates of our aircraft and other aviation assets include:

•  the particular maintenance and operating history of the airframes and engines;
•  the number of operators using that type of aircraft or engine;
•  whether an aircraft or other aviation asset is subject to a lease and, if so, whether the lease terms are favorable to the lessor;
•  the age of our aircraft and other aviation assets;
•  any tax, customs, regulatory and other legal requirements that must be satisfied when an aircraft is purchased, sold or re-leased;
•  compatibility of our aircraft configurations or specifications with other aircraft owned by operators of that type; and
•  decreases in the creditworthiness of our lessees.

Any decrease in the values of and achievable lease rates for commercial aircraft or other aviation assets that may result from the above factors or other unanticipated factors may have a material adverse effect on our financial results and growth prospects and our ability to meet our debt obligations and to pay dividends.

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The purchase price we are paying for the aircraft in our Initial Portfolio will be based on the purchase price of our shares in this offering and the value of such shares is subject to all of the risks set forth in this prospectus.

We will acquire the aircraft in our Initial Portfolio pursuant to an asset purchase agreement with affiliates of GE. See ‘‘Asset Purchase Agreement.’’ The asset purchase agreement has not been negotiated on an arm's-length basis. The price per share to be paid by investors who purchase our shares in this offering will be used in a formula to determine the purchase price we pay for the aircraft and related leases in our Initial Portfolio, and such purchase price will not be based on a valuation of such assets or their net book value reflected in the predecessor financial statements. See ‘‘Use of Proceeds.’’ The value of such shares is uncertain and subject to all the risks set forth in this prospectus.

We may be required to substitute some aircraft in our Initial Portfolio.

Many of the aircraft in our Initial Portfolio will not be delivered upon the completion of this offering. Under the asset purchase agreement, GE and its affiliates are obligated to deliver the aircraft not delivered at closing within 210 days of the completion of this offering. However, the transfer of the aircraft to us will require the cooperation of lessees, and we cannot assure you that they will cooperate or that all of the aircraft in our Initial Portfolio will be delivered before the end of this delivery period. If GE is unable to deliver any aircraft before the end of this period for any reason other than the destruction of, or substantial damage to, the aircraft, then GE must use reasonable efforts to designate a substitute aircraft for the undelivered aircraft before the end of such 210-day period. If an aircraft is destroyed or substantially damaged, GE may identify a substitute aircraft if it chooses. A substitute aircraft, individually or in the aggregate with other substitute aircraft, must be reasonably acceptable to us and must meet certain conditions. In determining whether to grant our consent we will consider various factors including appraised value, lease terms, and type, location and remaining useful life of the aircraft and the delivery of substitute aircraft will be subject to confirmation by each of the rating agencies rating the notes issued in the securitization that it will not lower, qualify or withdraw its rating on the notes as a result of the delivery of that substitute aircraft and the consent of the policy provider (unless such substitution will not result in an adverse change to the policy provider's capital charge with respect to the notes issued in the securitization or the ratings assigned to the notes by each rating agency (without regard to the policy)). If a substitute aircraft is not delivered within the 210-day period following the completion of this offering for any reason, GE will refund a portion of the purchase price of our Initial Portfolio. See ‘‘Asset Purchase Agreement.’’

If substitute aircraft are delivered, we may be required to restate our predecessor financial statements and pro forma financial statements to reflect the substitute aircraft and related leases if the substitution were to have a material impact on our predecessor financial statements. A restatement could impair our access to capital markets, increase the likelihood of litigation against us and reduce the trading price of our shares.

Some of the aircraft in our Initial Portfolio have been damaged and subsequently repaired.

Under the asset purchase agreement, we are obligated to accept delivery of any aircraft that has been materially damaged if such aircraft has been repaired prior to the delivery date for such aircraft and otherwise meets the conditions precedent for aircraft delivery. Some of the aircraft in our Initial Portfolio have been damaged. Even though these aircraft have been repaired, we may not be able to resell or re-lease such aircraft on terms as favorable as those for an aircraft that has not been damaged.

The advent of superior aircraft technology could cause our existing aircraft portfolio to become outdated and therefore less desirable, which could adversely affect our financial results and growth prospects and our ability to compete in the marketplace.

As manufacturers introduce technological innovations and new types of aircraft, including the Boeing 787 Dreamliner and the Airbus A350 (currently scheduled to enter service in 2008 and 2012, respectively) and a replacement type for the Boeing 737 and Airbus A320 families of aircraft, certain aircraft in our existing aircraft portfolio may become less desirable to potential lessees. In addition,

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although all of the aircraft in our Initial Portfolio are Stage 3 noise-compliant, the imposition of stringent noise or emissions regulations may make certain of our aircraft less desirable in the marketplace. Any of these risks could adversely affect our ability to lease or sell our aircraft on favorable terms or at all or our ability to charge rental amounts that we would otherwise seek to charge.

Our operational costs will increase as our aircraft age, which will adversely affect the amounts available to pay dividends.

As of September 30, 2006, the weighted average age of the aircraft in our Initial Portfolio was 5.5 years. In general, the cost of redelivering an aircraft under a re-lease, including maintenance and modification expenditures, increases with the age of the aircraft. The costs of converting an aging passenger aircraft to a cargo aircraft are also substantial. The incurrence of these greater expenses as our fleet ages could adversely affect our ability to pay dividends.

The concentration of aircraft types in our Initial Portfolio could harm our business and financial results should any difficulties specific to these particular types of aircraft occur.

Of the aircraft in our Initial Portfolio, approximately 42% are Boeing 737-800 aircraft, approximately 27% are Airbus A320-200 aircraft and approximately 31% are various other aircraft. If any of these aircraft types (or other types that we acquire in the future) should encounter technical or other difficulties, such affected aircraft types may be subject to grounding or diminution in value and we may be unable to lease such affected aircraft types on favorable terms or at all. The inability to lease the affected aircraft types may reduce our revenues and net income to the extent the affected aircraft types comprise a significant percentage of our aircraft portfolio. In addition, the abandonment or rejection of the lease of any of the types of aircraft listed above by one or more carriers in reorganization proceedings under Chapter 11 of the U.S. Bankruptcy Code or comparable statutes in non-U.S. jurisdictions may diminish the value of such aircraft and will subject us to re-leasing risks.

We operate in a highly competitive market for investment opportunities in aircraft and other aviation assets.

The leasing and remarketing of commercial jet aircraft is highly competitive. As the exclusive servicer of our aircraft, GECAS competes in leasing, re-leasing and selling our aircraft with other aircraft leasing companies, including ILFC, AerCap, Aircastle, Aviation Capital Group, AWAS, Babcock & Brown, Boeing Capital, CIT Aerospace, GATX Air, Pegasus Aviation, RBS Aviation Capital and Singapore Aircraft Leasing Enterprise. We also may encounter competition from other entities that selectively compete with us, including:

•  airlines;
•  aircraft manufacturers;
•  financial institutions (including those seeking to dispose of repossessed aircraft at distressed prices);
•  aircraft brokers;
•  special purpose vehicles formed for the purpose of acquiring, leasing and selling aircraft; and
•  public and private partnerships, investors and funds, including private equity and hedge funds.

Competition for a leasing transaction is based principally upon lease rates, delivery dates, lease terms, reputation, management expertise, aircraft condition, specifications and configuration and the availability of the types of aircraft necessary to meet the needs of the customer. Some of our competitors have significantly greater resources than we have. In addition, some competing aircraft lessors have a lower overall cost of capital and may provide financial services, maintenance services or other inducements to potential lessees that we cannot provide. Given the financial condition of the airline industry, many airlines have reduced their capacity by eliminating select types of aircraft from their fleets. This has resulted in an increase in available aircraft of these types, a decrease in rental rates for these aircraft and a decrease in market values of these aircraft.

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Competition in the purchase and sale of used aircraft is based principally on the availability of used aircraft, price, the terms of the lease to which an aircraft is subject and the creditworthiness of the lessee. When we decide to dispose of an aircraft, GECAS, as our servicer, will arrange the disposition pursuant to the terms of the servicing agreement for that aircraft. In doing so, GECAS will compete with the aircraft leasing companies listed above, as well as with the other types of entities described above and other investors. GECAS is not required to assist us in the purchase of used aircraft, and therefore we also will compete with GECAS when seeking to acquire aircraft.

If demand for leased aircraft does not increase, we may not be able to expand our business.

Over the past 20 years, the world’s airlines have leased a growing proportion of their aircraft. The proportion of the global fleet owned by operators has declined from 71% in 1990 to 54% in 2005, and the portion of the global fleet under operating lease has increased from approximately 18% to 30% during this period. Our growth strategy contemplates future acquisitions and leasing of additional commercial aircraft and other aviation assets. If, however, the aggregate demand for leased aircraft does not expand, then we may be unable to implement our growth strategy through aircraft acquisitions. Failure to expand our aircraft portfolio would impair our ability to sustain our revenues or support our expected dividend payments.

Depreciation expenses and impairment charges could have a material adverse effect on our financial condition and results of operations.

Our aircraft have finite economic lives, their values depreciate in the ordinary course over time and their ability to generate earnings and cash flow for our business declines over time. If depreciated aircraft are not replaced with newer aircraft, our ability to generate earnings and cash to pay dividends will be reduced. In addition, we depreciate our aircraft for accounting purposes on a straight-line basis to the aircraft's estimated residual value over its estimated useful life. If we dispose of an aircraft for a price that is less than its depreciated value, then we would be required to recognize a loss that would reduce our net income during the period of the disposition and reduce our total assets.

In addition, aircraft in our Initial Portfolio and any other aircraft and other aviation assets that we acquire in the future are expected to be under operating leases that are subject to periodic review for impairment for accounting purposes. We believe the carrying value of the aircraft in our Initial Portfolio is currently recoverable through the cash flows expected to result from their use and eventual disposition. However, if these expected cash flows are adversely affected by factors including credit deterioration of a lessee, declines in rental rates, other market conditions and residual values, then we may be required to recognize material impairment charges that would reduce our net earnings or increase our net losses. Under GAAP, once an impairment results in a reduction to the carrying value of an asset, the carrying value of such asset cannot thereafter be increased.

The appraised base values of the aircraft in our Initial Portfolio were prepared in connection with the securitization and should not be relied upon as indicative of the value of our Initial Portfolio.

The base value of the aircraft in our Initial Portfolio prepared in connection with the securitization was determined in accordance with market practice for securitizations without regard to rental revenues from existing leases relating to such aircraft or any physical inspection of the aircraft. Contrary to these assumptions, each aircraft in our Initial Portfolio is subject to a lease providing for a stream of contracted rents. The appraisers for the securitization also assumed an open, unrestricted stable market environment with a balance of supply and demand, as well as other factors common for aircraft appraisals. In practice, market conditions will vary from the appraisers’ assumptions, and there are typically imbalances of aircraft supply and demand that may be particularly pronounced for specific aircraft types. At a cyclical low, the market value of most aircraft types may be less than the appraised base values. Accordingly, you should not rely on the appraised base values as a measure of current realizable value or as a measure of the value to us of our Initial Portfolio as a source of revenues and cash flows. See ‘‘Description of Indebtedness—Securitization—Payment Terms.’’

Aircraft liens could impair our ability to repossess, re-lease or resell the aircraft.

In the normal course of business, liens that secure the payment of airport fees and taxes, custom duties, air navigation charges, landing charges, crew wages, repairer’s charges, salvage or other

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obligations are likely, depending on the laws of the jurisdictions where aircraft operate, to attach to the aircraft (or, if applicable, to the engines separately). The liens may secure substantial sums that may, in certain jurisdictions or for limited types of liens (particularly fleet liens), exceed the value of any particular aircraft to which the liens have attached. Until they are discharged, the liens described above could impair our ability to repossess, re-lease or resell our aircraft.

Although financial obligations are the responsibilities of the lessees, if they fail to fulfill their obligations, liens may attach. In some jurisdictions, aircraft liens or separate engine liens may give the holder thereof the right to detain or, in limited cases, sell or cause the forfeiture of the aircraft (or, if applicable, the engines separately). We cannot assure you that the lessees will comply with their obligations under the leases to discharge liens arising during the terms of the leases. We may, in some cases, find it necessary to pay the claims secured by such liens in order to repossess the aircraft or obtain the aircraft or engines from a creditor thereof. These payments would be a required expense for us and would reduce our net income and our cash flows.

We cannot assure you that all lessees will comply with the registration requirements in the jurisdiction where they operate.

All of our aircraft are required to be registered at all times with appropriate governmental authorities. Generally, in jurisdictions outside the United States, failure by a lessee to maintain the registration of a leased aircraft would be a default under the applicable lease, entitling us to exercise our rights and remedies thereunder. If an aircraft were to be operated without a valid registration, the lessee operator or, in some cases, the owner or lessor might be subject to penalties, which could constitute or result in a lien being placed on such aircraft. Failure to comply with registration requirements also could have other adverse effects, including inability to operate the aircraft and loss of insurance. We cannot assure you that all lessees will comply with these requirements.

Government regulations could require substantial expenditures, reduce our profitability and limit our growth.

Certain aspects of our business are subject to regulation and require the oversight and regulation by state, federal and foreign governmental authorities. Aircraft are subject to regulations imposed by aviation authorities regarding aircraft maintenance and airworthiness. Laws affecting the airworthiness of aircraft generally are designed to ensure that all aircraft and related equipment are continuously maintained in proper condition to enable safe operation of the aircraft. Aircraft manufacturers may also issue their own recommendations. Airworthiness directives and similar requirements typically set forth particular special maintenance actions or modifications to certain aircraft types or models that the owners or operators of aircraft must implement.

Each lessee generally is responsible for complying with airworthiness directives with respect to its aircraft and is required to maintain the aircraft’s airworthiness. To the extent that a lessee fails to comply with airworthiness directives required to maintain its certificate of airworthiness or other manufacturer requirements in respect of an aircraft or if the aircraft is not currently subject to a lease, we may have to bear the cost of such compliance. Under many leases, we have agreed to share with our lessees the cost of obligations under airworthiness directives (or similar requirements). In addition, if the aircraft is not subject to a lease, we may be forced to bear (or, to induce a prospective lessee to take the aircraft on lease, have to agree to pay) the cost of compliance with airworthiness directives. These expenditures can be substantial, and, to the extent we are required to pay them, our cash flow and ability to pay dividends could be substantially adversely affected.

In addition to these expenditures, which may be substantial, significant new requirements with respect to noise standards, emission standards and other aspects of our aircraft or their operation could cause our costs to increase and could cause the value of our aircraft portfolio to decrease. Other governmental regulations relating to noise and emissions levels may be imposed not only by the jurisdictions in which the aircraft are registered, possibly as part of the airworthiness requirements, but also by other jurisdictions where the aircraft operate. In addition, most countries’ aviation laws require aircraft to be maintained under an approved maintenance program having defined procedures and

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intervals for inspection, maintenance and repair. To the extent that our aircraft are off lease or a lessee defaults in effecting such compliance, we will be required to comply with such requirements at our expense.

It may be difficult or impossible to obtain title to one of the aircraft in our Initial Portfolio upon a bankruptcy or default by its owner and manager.

One of the aircraft in our Initial Portfolio (with a net book value of $39.8 million as of December 31, 2005) is on lease to a lessee based in Japan. Under Japanese law, title to each aircraft registered in Japan must be held by a Japanese entity. Accordingly, in order to permit the registration of this aircraft in Japan, legal title to the aircraft is held by a third-party Japanese corporation owned and managed by one of the major trading companies in Japan. However, beneficial ownership of the aircraft will effectively be held by an entity, the beneficial interest in which will be held by Genesis Funding. Title to this aircraft will be transferred under the terms of a conditional sales agreement to such entity upon payment by such entity to the third-party Japanese owner of one U.S. dollar on the date the lease of the aircraft expires or any earlier date elected by such entity provided that (1) there is no continuing default by such entity and certain representations and warranties of such entity remain true and accurate and (2) the third-party Japanese owner is indemnified by the lessee for costs and taxes that arise as a result of the title transfer. While these liabilities are the responsibility of the lessee, if they are not paid, the entity holding the beneficial interest may effectively have to pay such amounts in order for title to be transferred. Under the conditional sale agreement, Genesis Funding effectively will have full control over the leasing of the aircraft to the lessee, but full liability to the Japanese title owner with respect to the aircraft if the lessee does not perform its indemnity or other obligations. The obligation of the third-party Japanese owner to transfer title to such entity is secured by a mortgage over the leased aircraft, and a share pledge over the entire share capital of the third-party Japanese owner, each in favor of such entity. Although the conditional sale agreement provides for title to transfer automatically, a bill of sale may be required to legally effect such transfer of title. There may be tax related considerations or issues relating to the validity of the method of title transfer depending on the location of the aircraft (and the related engines) at the time of transfer that may need to be considered at the time of transfer and which may affect the decision as to when to transfer title. It is also possible that the Japanese title owner or its manager parent company could breach its obligation to provide a bill of sale to document properly the title transfer to Genesis Funding, which could also result in possible impairment of our ability to obtain such evidence of title to the aircraft in a timely fashion or at all.

In the event of a bankruptcy proceeding involving the Japanese manager of this aircraft, the separateness of the corporate existence of the Japanese owner of the aircraft and the Japanese manager may be disregarded and this aircraft, if the third-party Japanese owner still holds legal title to it, may be consolidated with the assets of the Japanese manager and may become part of the bankruptcy estate, resulting in the possible impairment of our ability to obtain title to the aircraft in a timely fashion or at all.

Risks Relating to Our Leases

We will need to re-lease or sell aircraft as leases expire to continue to generate sufficient funds to meet our debt obligations, finance our growth and operations and pay dividends. We may not be able to re-lease or sell aircraft on favorable terms, or at all.

Our business strategy entails the need to re-lease aircraft as our current leases expire to generate sufficient revenues to meet our debt obligations, finance our growth and operations and pay dividends to our shareholders. The ability to re-lease aircraft will depend on general market and competitive conditions. Some of our competitors may have greater access to financial resources and, as a result of restrictions on us contained in the terms of our indebtedness, may have greater operational flexibility. If we are not able to re-lease an aircraft or to do so on favorable terms, we may be required to attempt to sell the aircraft to provide funds for debt service or operating expenses. Our ability to re-lease or sell aircraft on favorable terms or without significant off-lease time could be adversely affected by depressed conditions in the airline and aircraft industries, airline bankruptcies, the effects of terrorism and war, the sale of other aircraft by financial institutions or other factors.

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We rely on our lessees’ continuing performance of their lease obligations.

We operate as a supplier to airlines and are indirectly impacted by the risks facing airlines today. Our success depends upon the financial strength of our lessees, our ability to assess the credit risk of our lessees and the ability of lessees to perform their contractual obligations to us. The ability of each lessee to perform its obligations under its lease will depend primarily on the lessee’s financial condition and cash flow, which may be affected by factors beyond our control, including:

•  competition;
•  fare levels;
•  air cargo rates;
•  passenger air travel and air cargo demand;
•  geopolitical and other events, including war, acts of terrorism, outbreaks of epidemic diseases and natural disasters;
•  operating costs, availability and cost of jet fuel and general economic conditions affecting our lessees’ operations;
•  labor difficulties;
•  economic conditions and currency fluctuations in the countries and regions in which the lessee operates; and
•  governmental regulation of, or affecting, the air transportation business.

Some of our lessees may experience payment difficulties. A delayed, missed or reduced rental payment from a lessee decreases our revenues and cash flow and may adversely affect our ability to make payments on our indebtedness and pay dividends to shareholders. We may experience delinquencies, particularly if economic conditions deteriorate. In addition, the demand for aircraft generally diminishes as they age, and the creditworthiness of the lessees of older aircraft is generally lower than the creditworthiness of the lessees of newer aircraft.

We will typically not be in possession of any aircraft while the aircraft are on lease to the lessees. Consequently, our ability to determine the condition of the aircraft or whether the lessees are properly maintaining the aircraft will be limited to periodic inspections that we perform or that are performed on our behalf by third-party service providers or aircraft inspectors. A lessee’s failure to meet its maintenance obligations under a lease could:

•  result in a grounding of the aircraft;
•  cause us to incur costs in restoring the aircraft to an acceptable maintenance condition to re-lease the aircraft;
•  adversely affect lease terms in the re-lease of the aircraft; and
•  adversely affect the value of the aircraft.

We cannot assure you that, in the event that a lessee defaults under a lease, any security deposit paid or letter of credit provided by the lessee will be sufficient to cover the lessee’s outstanding or unpaid lease obligations and required maintenance expenses.

Because some airlines are in a weak financial condition and suffer liquidity problems, we may have trouble collecting lease payments on a timely basis or at all, which would adversely affect our revenues and cash flows and may adversely affect our ability to meet our debt obligations and pay dividends.

Some airlines are in a weak financial condition and suffer liquidity problems, and this is likely to be the case in the future with other airlines. In addition, many airlines are exposed to currency risk due to the fact that they earn revenues in their local currencies and certain of their liabilities and expenses are denominated in U.S. dollars, including lease payments to us. Given the size of our aircraft portfolio, we expect that some lessees from time to time, and possibly in the near future, will

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be slow in making or will fail to make their payments in full under the leases. Some lessees encountering financial difficulties may seek a reduction in their lease rates or other concessions such as a decrease in their contribution toward maintenance obligations. A delayed, missed or reduced rental payment from a lessee would reduce our revenues and may adversely affect our ability to make payments on the notes issued in the securitization and pay dividends on our shares. While we may experience some level of delinquency under our leases, default levels may increase over time, particularly as our aircraft portfolio ages and if economic conditions deteriorate.

If our lessees encounter financial difficulties and we decide to restructure our leases with those lessees, this could result in less favorable leases, significant reductions in our cash flows and adversely affect our ability to meet our debt obligations and pay dividends on our shares.

We may be required to restructure a lease when a lessee is late in making payments, fails to make required payments or has otherwise advised us that it expects to default in making required payments. Restructuring may involve anything from a simple rescheduling of payments to the termination of a lease without receiving all or any of the past-due amounts. The terms and conditions of possible lease restructurings could result in significant reductions of rental payments, which would have an adverse impact on our cash flow available for distribution and reduced dividends to shareholders.

Because many of our lessees operate in emerging markets, we are indirectly subject to many of the economic and political risks associated with competing in such markets.

Emerging markets are countries which have developing economies that are vulnerable to business and political disturbances, such as significant economic instability, interest and exchange rate fluctuations, civil unrest, government instability, and the nationalization or expropriation of private assets. The occurrence of any of these events in markets served by our lessees and the resulting instability may adversely affect our ownership interest in aircraft or the ability of lessees which operate in these markets to meet their lease obligations and these lessees may be more likely to default than lessees that operate in developed economies. Our Initial Portfolio includes 23 aircraft leased to lessees that are domiciled in emerging markets, representing 58% of the weighted average of our Initial Portfolio.

We may be required to purchase repossession insurance if GECAS re-leases any of our aircraft to lessees located in certain jurisdictions.

Under the servicing agreements, GECAS has broad discretion to re-lease aircraft to lessees around the world, subject to the concentration limits and other restrictions in the indenture. Under the indenture for the notes issued in the securitization, if an aircraft is leased to a lessee in certain specified jurisdictions (including, among others, Belarus, Bhutan, Kazakhstan and Mongolia) we may be required to purchase insurance to ensure our ability to repossess the aircraft. If GECAS re-leases any of our aircraft to lessees in these jurisdictions, our expenses may increase due to the need to purchase repossession insurance.

Lease defaults could result in significant expenses and loss of revenues.

If we are unable to agree upon acceptable terms for a lease restructuring, then we have the right to repossess aircraft and to exercise other remedies upon a lessee default. However, repossession, re-registration and flight and export permissions after a lessee default typically result in greater costs than those incurred when an aircraft is returned at the end of a lease. These costs include legal expenses that could be significant, particularly if the lessee is contesting the proceedings or is in bankruptcy. Delays resulting from repossession proceedings also would increase the period of time during which an aircraft or other aviation asset does not generate rental revenue. In addition, we may incur substantial maintenance, refurbishment or repair costs that a defaulting lessee has failed to pay and that are necessary to put the aircraft in a condition suitable for re-lease or sale, and we may need to pay off liens, taxes and governmental charges on the aircraft or other aviation asset to obtain clear possession and to remarket the asset effectively.

If we repossess an aircraft or other aviation asset, we will not necessarily be able to export or deregister and profitably redeploy the asset. For instance, where a lessee or other operator flies only

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domestic routes in the jurisdiction in which an aircraft is registered, repossession may be more difficult, especially if the jurisdiction permits the lessee or the other operator to resist deregistration. Significant costs may also be incurred in retrieving or recreating aircraft records required for registration of the aircraft and obtaining a certificate of airworthiness for the aircraft or engine.

Our lessees' inability to fund their maintenance requirements on our aircraft could significantly harm our revenues, cash flows and ability to pay dividends.

The standards of maintenance observed by our lessees and the condition of aircraft at the time of sale or lease may affect the values and rental rates of our aircraft. Under each of our leases, the lessee is primarily responsible for maintaining the aircraft and complying with all governmental requirements applicable to the lessee and to the aircraft, including operational, maintenance, and registration requirements and airworthiness directives. A lessee’s failure to perform required maintenance during the term of a lease could result in a diminution in the value of an aircraft, an inability to lease the aircraft at favorable rates or at all, or a potential grounding of the aircraft, and would likely require us to incur maintenance and modification costs upon the expiration or earlier termination of the lease to restore the aircraft to an acceptable condition prior to sale or re-leasing.

Failure to pay certain potential additional operating costs could result in the grounding of our aircraft and prevent the re-lease, sale or other use of our aircraft, which would negatively affect our business, financial condition and results of operations.

As in the case of maintenance costs, we may incur other operational costs upon a lessee default or where the terms of the lease require us to pay a portion of those costs. Such costs, which can be substantial, include:

•  the costs of casualty, liability, war and political risk insurance and the liability costs or losses when insurance coverage has not been or cannot be obtained as required or is insufficient in amount or scope;
•  the costs of licensing, exporting or importing an aircraft, costs of storing and operating an aircraft, airport taxes, customs duties, air navigation charges, landing fees and similar governmental or quasi-governmental impositions; and
•  penalties and costs associated with the failure of lessees to keep the aircraft registered under all appropriate local requirements or obtain required governmental licenses, consents and approvals.

The failure to pay some of these costs can result in liens on the aircraft or a loss of insurance. Any of these events could result in the grounding of the aircraft and prevent the re-lease, sale or other use of the aircraft until the problem is cured.

Our lessees may have inadequate insurance coverage or fail to fulfill their respective indemnity obligations, which could result in us not being covered for claims asserted against us and may negatively affect our business, financial condition and results of operations.

Although we do not expect to control the operation of our leased aircraft, our ownership of the aircraft could give rise, in some jurisdictions, to strict liability for losses resulting from their operation. Our lessees are required to indemnify us for, and insure against, liabilities arising out of the use and operation of the aircraft, including third-party claims for death or injury to persons and damage to property for which we may be deemed liable. Lessees are also required to maintain public liability, property damage and hull all risks and hull war risks insurance on the aircraft at agreed upon levels. However, they are not generally required to maintain political risk insurance.

Following the terrorist attacks of September 11, 2001, aviation insurers significantly reduced the amount of insurance coverage available to airlines for liability to persons other than employees or passengers for claims resulting from acts of terrorism, war or similar events. At the same time, they significantly increased the premiums for such third-party war risk and terrorism liability insurance and coverage in general. As a result, the amount of such third-party war risk and terrorism liability insurance that is available at any time may be below the amount required under the initial leases and required by the market in general.

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We cannot assure you that the insurance maintained by our lessees will be sufficient to cover all types of claims that may be asserted against us. Any inadequate insurance coverage or default by lessees in fulfilling their indemnification or insurance obligations, as well as the lack of available insurance, could reduce the proceeds upon an event of loss and could subject us to uninsured liabilities, either of which could adversely affect our business, financial condition and results of operations.

Failure to obtain certain required licenses, consents and approvals could negatively affect our ability to re-lease or sell aircraft, which would negatively affect our business, financial condition and results of operations.

Aircraft leases often require specific licenses, consents or approvals. These include consents from governmental or regulatory authorities for certain payments under the leases and for the import, re-export or deregistration of the aircraft. Subsequent changes in applicable law or administrative practice may increase these requirements. In addition, a governmental consent, once given, might be withdrawn. Furthermore, consents needed in connection with future re-leasing or sale of an aircraft may not be forthcoming. Any of these events could adversely affect our ability to re-lease or sell aircraft, which would negatively affect our business, financial condition and results of operations.

Some of our leases provide the lessees with early termination rights.

Ten of the leases in our Initial Portfolio provide the lessees with early termination rights. We also could enter into leases in the future that provide lessees with early termination rights. If any lease is terminated early at a time when we could not re-lease the aircraft at rates at least as favorable to us as the terminated lease, our results of operations and ability to pay dividends could be adversely affected. See ‘‘Business—Our Leases—Early Termination Rights.’’

Risks associated with the concentration of our lessees in certain geographical regions could harm our business.

Our business is exposed to local economic and political conditions that can influence the performance of lessees located in a particular region. The effect of these conditions on payments to us will be more or less pronounced, depending on the concentration of lessees in the region with adverse conditions.

European concentration.    Lease rental revenues from 10 lessees based in Europe accounted for 37.1% of total revenues for the nine months ended September 30, 2006. Commercial airlines in Europe face, and can be expected to continue to face, increased competitive pressures, in part as a result of the deregulation of the airline industry by the European Union and the development of low-cost carriers. European countries generally have relatively strict environmental regulations and traffic constraints that can restrict operational flexibility and decrease aircraft productivity, which could significantly increase aircraft operating costs.

Asian concentration.    Lease rental revenues from seven lessees based in Asia (including China) accounted for 25.5% of total revenues for the nine months ended September 30, 2006, and lease rental revenues from three lessees based in China accounted for 12.4% of total revenues. There are significant obstacles to the Chinese airline industry’s development, including continuing government control and regulation over the industry. If this control and regulation persists or expands, the Chinese airline industry likely would experience a significant decrease in growth or restrictions on future growth.

North American concentration.    Lease rental revenues from six lessees based in North America accounted for 18.0% of total revenues for the nine months ended September 30, 2006. During the past 15 years a number of North American passenger airlines filed Chapter 11 bankruptcy proceedings and several major U.S. airlines ceased operations altogether. The outbreak of Severe Acute Respiratory Syndrome (SARS), high labor costs, high fuel costs, the strength of labor unions in collective bargaining negotiations, the war and prolonged conflict in Iraq and the September 11, 2001 terrorist attacks in the United States have imposed additional financial burdens on most U.S. airlines.

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The geographic classifications and revenue information for the lessees discussed above are based on the predecessor combined financial statements as of and for the nine months ended September 30, 2006 which reflect the 40 aircraft owned by our predecessor during such period and are included elsewhere in this prospectus.

Risks Related to the Aviation Industry

A deterioration in the financial condition of the commercial airline industry would have an adverse impact on our ability to lease our aircraft, sustain our revenues and pay dividends.

The financial condition of the commercial airline industry is of particular importance to us because we lease most of our aircraft to commercial airline customers. Our ability to achieve our primary business objectives of growing our lease portfolio and increasing distributable cash flow per share will depend on the financial condition and growth of the commercial airline industry. The risks affecting our airline customers are generally out of our control, but because they have a significant impact on our customers they affect us as well. The risk factors that follow describe risks that affect the commercial airline industry generally and therefore have an impact on our business, financial condition and results of operations. These risks are generally not within our control. Our ability to succeed depends on the financial strength of our customers and their ability to manage these risks. To the extent that our customers are adversely affected by these risk factors, we may experience:

•  downward pressure on demand for the aircraft in our fleet and reduced market lease rates and lease margins;
•  a higher incidence of lessee defaults, lease restructurings, repossessions and airline bankruptcies and restructurings, resulting in lower lease margins due to maintenance and legal costs associated with the repossession, as well as lost revenue for the time the aircraft are off lease and possibly lower lease rates from the new lessees;
•  an inability to lease aircraft on commercially acceptable terms, resulting in lower lease margins due to aircraft not earning revenue and resulting in storage, insurance and maintenance costs; and
•  a loss if our aircraft is damaged or destroyed by an event specifically excluded from an insurance policy, such as dirty bombs, bio-hazardous materials and electromagnetic pulsing.

Airline reorganizations could impair our lessees' ability to comply with their lease payment obligations to us.

In recent years, several U.S. airlines have sought to reorganize (and, in certain instances, have completed reorganization) under Chapter 11, and numerous other airlines have filed for similar protection under their local laws. Historically, airlines involved in reorganizations have undertaken substantial fare discounting to maintain cash flows and to encourage continued customer loyalty. This fare discounting has led to lower yields for all airlines, including certain of our lessees. The bankruptcies have led to the grounding of significant numbers of aircraft, rejections of leases and negotiated reductions in aircraft lease rentals, with the effect of depressing aircraft market values.

Additional reorganizations or liquidations by airlines under applicable bankruptcy or reorganization laws or further rejection or abandonment of aircraft by airlines in bankruptcy proceedings may depress aircraft values and aircraft lease rates. Additional grounded aircraft and lower market values would adversely affect our ability to sell certain of our aircraft or re-lease other aircraft at favorable rates.

As high fuel prices continue to affect the profitability of the airline industry, our lessees might not be able to meet their lease payment obligations to us.

Fuel costs represent a major expense to companies operating within the airline industry, and fuel prices fluctuate widely depending primarily on international market conditions, geopolitical and environmental events and currency exchange rates. In addition, natural disasters can significantly affect fuel availability and prices. For example, in August and September 2005, Hurricanes Katrina

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and Rita inflicted widespread damage along the Gulf Coast of the United States, causing significant disruptions to oil production, refinery operations and pipeline capacity in the region and to oil production in the Gulf of Mexico. These disruptions resulted in decreased fuel availability and higher fuel prices.

Fuel prices have recently been at historically high levels. The continuing high cost of fuel will likely have a material adverse impact on airline profitability. Due to the competitive nature of the airline industry, airlines may not be able to pass on increases in fuel prices to their customers by increasing fares. If they pass on the higher costs, it may adversely affect demand for air travel, which would reduce revenues to our customers. In addition, airlines may not be able to manage this risk by appropriately hedging their exposure to fuel price fluctuations. If fuel prices remain at historically high levels or increase further, they are likely to cause our lessees to incur higher costs or experience reduced revenues. Consequently, these conditions may:

•  affect our lessees’ ability to make rental and other lease payments;
•  result in lease restructurings and aircraft and engine repossessions;
•  increase our costs of servicing and marketing aircraft;
•  impair our ability to re-lease the aircraft and other aviation assets or re-lease or otherwise dispose of the assets on a timely basis at favorable rates; and
•  reduce the proceeds received for the aircraft or other aviation assets upon any disposition.

The effects of terrorist attacks and geopolitical conditions may negatively affect the airline industry. This may cause our lessees to default on their lease payment obligations to us.

As a result of the September 11, 2001 terrorist attacks in the United States and subsequent terrorist attacks abroad, airports have increased security restrictions, airline costs for aircraft insurance and enhanced security measures have increased and airlines have faced increased difficulties in acquiring war risk and other insurance at reasonable costs. Terrorist attacks and geopolitical conditions have harmed the airline industry, and concerns about geopolitical conditions and further terrorist attacks could harm airlines in the future as a result of various factors, including:

•  higher costs to airlines because of increased security measures;
•  the inconvenience of additional security measures;
•  the price and availability of jet fuel and the cost and practicability of obtaining fuel hedges under current market conditions; and
•  significantly higher costs of aircraft insurance coverage for claims caused by acts of war, terrorism, sabotage, hijacking and other similar perils, and the extent to which such insurance has been or will continue to be available.

Future terrorist attacks, war or armed hostilities, or the fear of such events, may further increase airline costs, depress air travel demand, cause certain aviation insurance to become available only at significantly increased premiums or not be available at all and could have a further adverse impact on the airline industry and on the financial condition and liquidity of our lessees, aircraft values and rental rates, all of which could adversely affect our financial results, growth prospects and ability to pay dividends.

The effects of pandemic diseases may negatively affect the airline industry. This may cause our lessees to default on their lease payment obligations to us.

The 2003 outbreak of SARS was linked to air travel early in its development and had a severe adverse impact on the aviation industry, which was evidenced by a sharp reduction in passenger bookings, cancellation of many flights and employee layoffs. In addition, since 2003, there have been several outbreaks of avian influenza, or the bird flu, beginning in Asia and, most recently, spreading to certain parts of Africa and Europe. Additional outbreaks of SARS or other pandemic diseases, or the fear of such events, could provoke responses, including government-imposed travel restrictions, which could negatively affect passenger demand for air travel and the financial condition of the aviation industry.

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We depend on aircraft and engine manufacturers’ success in remaining financially stable and producing aircraft.

The supply of jet aircraft, which we purchase and lease, is dominated by two airframe manufacturers, Boeing and Airbus, and a limited number of engine manufacturers. We therefore depend on these manufacturers’ success in remaining financially stable and producing aircraft and related components which meet airlines’ demands and providing customer support. Further, competition between the manufacturers for market share is escalating and may cause instances of deep discounting for certain aircraft types and may have a negative impact on our competitive pricing when we sell or lease aircraft. Should the manufacturers fail to respond appropriately to changes in the market environment or fail to fulfill their contractual obligations, we may experience:

•  an inability to acquire aircraft and related components on terms that will allow us to lease those aircraft and related components to customers at our anticipated profit levels, resulting in lower growth rates or a contraction in our fleet;
•  poor customer support from the manufacturers of aircraft and components resulting in reduced demand for a particular manufacturer’s product, creating downward pressure on demand for those aircraft and components in our fleet and reduced market lease rates for those aircraft; and
•  reduction in our competitiveness due to deep discounting by the manufacturers, which may lead to reduced market lease rates and may adversely affect the value of our portfolio and our ability to remarket or sell some of the aircraft in our fleet.

Risks Related to the Ownership of Our Shares

Market interest rates may have an effect on the trading value of our shares.

One of the factors that investors may consider in deciding whether to buy or sell our shares is our dividend rate as a percentage of our shares price relative to market interest rates. If market interest rates increase, prospective investors may demand a higher dividend yield on our shares or seek alternative investments paying higher dividends or interest. As a result, interest rate fluctuations and capital market conditions can affect the market value of our shares. For instance, if interest rates rise, it is likely that the market price of our shares will decrease as market rates on interest-bearing securities, such as bonds, increase.

Our common shares and the ADSs through which they will be held have no public market, and we cannot assure you that an active trading market will develop.

Prior to this offering, there has not been a market for our common shares or ADSs. Although our ADSs have been approved for listing on the NYSE, subject to official notice of issuance, an active trading market in our shares might not develop or continue. If you purchase shares in this offering, you will pay a price that was not established in a competitive market. Rather, you will pay a price that was determined through negotiations with the representative of the underwriters based upon an assessment of the valuation of our shares and a book-building process. The public market may not agree with or accept this valuation, in which case you may not be able to sell your shares at or above the initial public offering price.

The market price and trading volume of our shares may be volatile and may be affected by market conditions beyond our control.

Even if an active trading market for the shares develops, the market price of our shares may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in the ADSs may fluctuate and cause significant price variations to occur. If the market price of the shares declines significantly, you may be unable to resell your shares at or above your purchase price, if at all. We cannot assure you that the market price of the shares will not fluctuate or decline significantly in the future. Some of the factors that could negatively affect our shares price or result in fluctuations in the price or trading volume of our shares include:

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•  variations in our quarterly operating results;
•  failure to meet our earnings estimates;
•  publication of research reports about us, other aircraft lessors or the aviation industry or the failure of securities analysts to cover our shares after this offering;
•  additions or departures of key management personnel;
•  adverse market reaction to any indebtedness we may incur or preference or common shares or ADSs we may issue in the future;
•  changes in our dividend payment policy or failure to execute our existing policy;
•  actions by shareholders;
•  changes in market valuations of similar companies;
•  announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments;
•  speculation in the press or investment community; and
•  changes or proposed changes in laws or regulations affecting the aviation industry or enforcement of these laws and regulations, or announcements relating to these matters.

In the past, the stock market has experienced extreme price and volume fluctuations. These market fluctuations could result in extreme volatility in the trading price of the shares, which could cause a decline in the value of your investment. You should also be aware that price volatility may be greater if the public float and trading volume of the shares is low.

We may issue additional shares without your approval, which would dilute your ownership interests and may depress share prices.

Upon the completion of this offering, we will have 31,310,000 shares issued and outstanding, assuming the underwriters do not exercise their over-allotment option. We expect to implement our growth strategy through the acquisition of additional aircraft and other aviation assets financed primarily by issuances of debt and equity securities. Subject to the rules of the NYSE, we may issue additional shares without shareholder approval in a number of circumstances.

Our issuance of additional shares or other equity securities of equal or senior rank will have the following effects:

•  our shareholders’ proportionate ownership interest in us will decrease;
•  the amount of cash available for dividends payable on our shares may decrease; and
•  the market price of our shares may decline.

We have anti-takeover provisions in our bye-laws that may discourage a change of control.

Our bye-laws contain provisions that could make it more difficult for a third party to acquire us without the consent of our board of directors. These include:

•  provisions that permit us to require any competitor of GECAS that acquires beneficial ownership of more than 10% of our common shares either to tender for all of our remaining common shares for no less than their fair market value, or sell such number of common shares to us or to third parties as would reduce its beneficial ownership to less than 10%, in either case within 90 days of our request to so tender or sell;
•  provisions that reduce the vote of each common share held by a competitor of GECAS that beneficially owns 10% or more, but less than 50%, of our common shares to one-fifth of one vote per share on all matters upon which shareholders may vote;
•  provisions that permit our board of directors to determine the powers, preferences and rights of our preference shares and to issue such preference shares without shareholder approval;

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•  advance notice requirements by shareholders for director nominations and actions to be taken at annual meetings; and
•  no provision for cumulative voting in the election of directors, such that all the directors standing for election may be elected by our shareholders by a plurality of votes cast at a duly convened annual general meeting, the quorum for which is two or more persons present in person or by proxy at the start of the meeting and representing in excess of 50% of all votes attaching to all shares in issue entitling the holder to vote at the meeting.

These provisions may make it difficult and expensive for a third party to pursue a tender offer, change in control or takeover attempt that is opposed by our management and/or our board of directors. Public shareholders who might desire to participate in these types of transactions may not have an opportunity to do so. These anti-takeover provisions could substantially impede the ability of public shareholders to benefit from a change in control or change our management and board of directors and, as a result, may adversely affect the market price of our shares and your ability to realize any potential change of control premium. See ‘‘Description of Share Capital — Anti-Takeover Provisions.’’

We are a Bermuda company that is managed and controlled in Ireland. It may be difficult for you to enforce judgments against us or against our directors and executive officers.

We were incorporated under the laws of Bermuda and are managed and controlled in Ireland. Our business is based outside the United States, a majority of our directors and officers, and some of the experts named in this prospectus, reside outside the United States and a majority of our assets and some or all of the assets of such persons are located outside the United States. As a result, it may be difficult or impossible to effect service of process within the United States upon us or those persons, or to recover against us or them on judgments of U.S. courts, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws. Further, no claim may be brought in Bermuda or Ireland against us or our directors and officers in the first instance for violation of U.S. federal securities laws because these laws have no extraterritorial application under Bermuda or Irish law and do not have force of law in Bermuda or Ireland. However, a Bermuda or Irish court may impose civil liability, including the possibility of monetary damages, on us or our directors and officers if the facts alleged in a complaint constitute or give rise to a cause of action under Bermuda or Irish law.

There is doubt as to whether the courts of Bermuda or Ireland would enforce judgments of U.S. courts obtained in actions against us or our directors and officers, as well as the experts named herein, predicated upon the civil liability provisions of the U.S. federal securities laws, or entertain actions brought in Bermuda or Ireland against us or such persons predicated solely upon U.S. federal securities laws. Further, there is no treaty in effect between the United States and Bermuda or Ireland providing for the enforcement of judgments of U.S. courts in civil and commercial matters, and there are grounds upon which Bermuda or Irish courts may decline to enforce the judgments of U.S. courts. Some remedies available under the laws of U.S. jurisdictions, including some remedies available under the U.S. federal securities laws, may not be allowed in Bermuda or Irish courts as contrary to public policy in Bermuda or Ireland. Because judgments of U.S. courts are not automatically enforceable in Bermuda or Ireland, it may be difficult for you to recover against us or our directors and officers based upon such judgments.

As a shareholder of our company, you may have greater difficulties in protecting your interests than as a shareholder of a U.S. corporation.

The Companies Act 1981 of Bermuda, as amended, which we refer to as the ‘‘Companies Act,’’ applies to our company and differs in material respects from laws generally applicable to U.S. corporations and their shareholders. Taken together with the provisions of our bye-laws, some of these differences may result in your having greater difficulties in protecting your interests as a shareholder of our company than you would have as a shareholder of a U.S. corporation. This affects, among other things, the circumstances under which transactions involving an interested director are voidable, whether an interested director can be held accountable for any benefit realized in a transaction with

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our company, what approvals are required for business combinations by our company with a large shareholder or a wholly-owned subsidiary, what rights you may have as a shareholder to enforce specified provisions of the Companies Act or our bye-laws, and the circumstances under which we may indemnify our directors and officers.

Risks Related to Taxation

We will be a passive foreign investment company, or PFIC. Unless U.S. holders of our shares make certain elections under U.S. federal income tax rules, they will be subject to certain adverse U.S. federal income tax rules.

Because we will be a PFIC, U.S. holders of our shares will be subject to certain adverse U.S. federal income tax rules. Under the PFIC rules, a U.S. holder who disposes or is deemed to dispose of our shares at a gain, or who receives or is deemed to receive certain distributions with respect to our shares, generally will be required to treat such gain or distributions as ordinary income and pay an interest charge on the tax imposed. Certain elections may be used to reduce or eliminate the adverse impact of the PFIC rules for holders of our shares (‘‘QEF elections’’ and ‘‘mark-to-market’’ elections), but these elections may accelerate the recognition of taxable income and may result in the recognition of ordinary income in excess of amounts distributed to you. Although we have estimated that if you make a QEF election the taxable income allocated to you initially will be less than projected distributions, if we do not acquire additional aircraft generating sufficient depreciation deductions for U.S. tax purposes, your share of the taxable income will likely exceed cash distributions at some point in the future. In addition, because we will be a PFIC, our distributions will not qualify for the reduced rate of U.S. federal income tax that applies to qualified dividends paid to non-corporate U.S. taxpayers. The PFIC rules are extremely complex, and prospective U.S. investors are urged to consult their own tax advisers regarding the potential consequences to them of our being classified as a PFIC. See ‘‘Taxation Considerations—U.S. Federal Income Tax Considerations—Taxation of U.S. Holders of Shares.’’

We may fail to qualify for tax treaty benefits and U.S. statutory tax exemptions which would reduce our net income and cash flow by the amount of the applicable tax.

Special U.S. tax rules apply to U.S. source transportation income. U.S. source rental income that is not connected with a U.S. trade or business may be subject to 30% withholding tax. Alternatively, U.S. source rental income could be subject to a 4% gross transportation tax. U.S. source transportation income connected to a U.S. trade or business would be taxed on a net basis. In order for us to be exempt from U.S. federal income taxation on each category of U.S. source transportation income, we and our Irish tax resident subsidiaries must qualify for benefits of the Irish Treaty. Qualification for Irish Treaty benefits depends on many factors, including that at least 50% of the vote and value of our Irish tax resident subsidiaries continues to be held by us and that our principal class of shares be substantially and regularly traded on one or more recognized stock exchanges. We may not satisfy all the requirements of the Irish Treaty and thereby may not qualify each year for the benefits of the Irish Treaty. Failure to so qualify could result in the income attributable to aircraft used for flights to, from or within the United States being subject to U.S. federal income taxation. The imposition of such taxes would adversely affect our business and would result in decreased cash available for distribution to our shareholders. See ‘‘Taxation Considerations—U.S. Federal Income Tax Considerations—Taxation of Genesis Lease Limited and Our Subsidiaries.’’

We may become subject to income or other taxes in the jurisdictions in which our aircraft operate, where our lessees are located or where we perform certain services which would adversely affect our business and result in decreased cash available for distributions to shareholders.

We and our Irish tax resident subsidiaries will be subject to the income tax laws of Ireland. In addition, we may be subject to income or other taxes in other jurisdictions by reason of our activities and operations or those of our service providers, where our aircraft operate or where the lessees of our aircraft (or others in possession of our aircraft) are located. The imposition of such taxes would adversely affect our business and would result in decreased earnings available for distribution to our shareholders.

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In addition, because Ireland does not have tax treaties with all jurisdictions, we may find it necessary to establish subsidiaries in other jurisdictions to lease or sublease aircraft to customers in those jurisdictions. Such subsidiaries may be subject to taxation in the jurisdictions in which they are organized, which would reduce our net income and have an adverse impact on our cash flow available for distribution to our shareholders.

The tax rate applicable to us, Genesis Funding and Genesis Acquisition would be higher than we expect if we or they were considered not to be carrying on a trade in Ireland for the purposes of Irish law.

Because we will be managed and controlled in Ireland, each of us, Genesis Funding and Genesis Acquisition will be subject to Irish corporation tax on our net trading income at the rate of 12.5%. Under Irish tax law, non-trading income is taxed at the rate of 25% and capital gains are taxed at the rate of 20%. Each of us, Genesis Funding and Genesis Acquisition intend to carry on sufficient activity in Ireland, directly and indirectly, through a servicer, so as to be treated as carrying on a trade in Ireland for the purposes of Irish tax law. In calculating our net trading income we will, in addition to all related expenses, deduct tax depreciation on the aircraft. Whether we and our Irish tax-resident subsidiaries are carrying on a trade for the purposes of Irish tax and have beneficial title to the aircraft are questions of fact and we cannot assure you that we or they will qualify, and we will be dependant on the Irish Revenue authorities accepting that we are engaged in an active business in Ireland and that we have full beneficial ownership of the aircraft.

One of the grounds for Genesis Funding being treated as engaged in an active business in Ireland is that GECAS, as servicer for the Initial Portfolio, is an Irish company, and GECAS will perform a major part of its obligations under the servicing agreement for the Initial Portfolio in Ireland. However, the servicing agreement does not require that GECAS will perform any of its obligations in Ireland, and GECAS could relocate its operations in the future and not perform any such obligations in Ireland. If that happens, the Irish Revenue Authorities may reexamine the eligibility of Genesis Funding for the 12.5% tax rate, and, if Genesis Funding were found to be not engaged in an active business in Ireland, all of its net income from leasing would be subject to the general Irish corporate tax rate of 25%. As a result, Genesis Funding would be liable earlier and in great amounts for tax on such income.

If we or any of our Irish tax-resident subsidiaries were considered not to be carrying on a trade in Ireland, we or they may be subject to additional Irish tax liabilities. The application of a higher tax rate (25% instead of 12.5%) on taxable income could reduce the cash flow available for distribution to our shareholders. In addition, we cannot assure you that the 12.5% tax rate applicable to trading income, the 20% tax rate applicable to capital gains or the 25% tax rate applicable to non-trading income will not be changed in the future.

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FORWARD-LOOKING STATEMENTS

Some of the statements under ‘‘Summary,’’ ‘‘Risk Factors,’’ ‘‘Unaudited Pro Forma Financial Statements,’’ ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations,’’ ‘‘The Commercial Aircraft Industry,’’ ‘‘Business,’’ ‘‘Taxation Considerations’’ and elsewhere in this prospectus include forward-looking statements. These statements include forward-looking statements both with respect to us specifically and the aircraft leasing industry generally. Statements that include the words ‘‘expect,’’ ‘‘intend,’’ ‘‘plan,’’ ‘‘believe,’’ ‘‘project,’’ ‘‘anticipate,’’ ‘‘will,’’ and similar statements of a future or forward-looking nature identify forward-looking statements.

The forward-looking statements contained in this prospectus are based on management’s current expectations (or those of SH&E in the case of ‘‘The Commercial Aircraft Industry’’) and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors, many of which are beyond our control. We believe that these factors include, but are not limited to, those described under ‘‘Risk Factors’’ and elsewhere in this prospectus. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

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USE OF PROCEEDS

We expect to receive net proceeds of $580.7 million in this offering, after deducting the underwriters’ discounts and commissions. This assumes an initial public offering price of $22.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus. We expect to use the net proceeds of this offering primarily to pay a portion of the purchase price for our Initial Portfolio.

The purchase price for our Initial Portfolio will be determined based on the initial public offering price in this offering, and will not be based upon a valuation of such assets. The purchase price will be equal to the sum of:

•  net proceeds from this offering after deducting the underwriters’ discounts and commissions (estimated at $580.7 million), plus
•  proceeds from the sale of shares to an affiliate of GE in the concurrent private placement (estimated at $75.9 million), plus
•  net proceeds of $804.5 million from the securitization, after deducting the initial purchasers' discount and fees, minus
•  $12.0 million to pay expenses related to our formation, this offering and the securitization, minus
•  a $20.0 million cash balance that we will retain for general corporate purposes.

Assuming an initial public offering price of $22.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, we estimate that the purchase price for our Initial Portfolio will be $1,429.1 million.

A $1.00 increase (decrease) in the assumed initial public offering price of $22.00 per share would:

•  increase (decrease) the aggregate net proceeds to us from this offering and the concurrent private placement to GE by $30.0 million, and
•  increase (decrease) the purchase price for our Initial Portfolio by $30.0 million.

Assuming an initial public offering price of $22.00 per share, our net proceeds will increase by approximately $99.0 million if the underwriters’ over-allotment option were exercised in full as a result of such exercise and the increased number of shares purchased by the affiliate of GE in the concurrent private placement. The net proceeds from the sale of shares issuable upon the exercise of the over-allotment option and such increased private placement will be added to our working capital and be used for general corporate purposes, which could include the purchase of additional aircraft and other aviation assets, and will not increase the purchase price for our Initial Portfolio.

We will acquire our Initial Portfolio from affiliates of GE. For more information on the purchase of our Initial Portfolio, please read ‘‘Asset Purchase Agreement.’’

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DIVIDEND POLICY

Overview

Our board of directors has adopted a policy to pay a regular quarterly cash dividend to our shareholders in an initial amount of $0.47 per share. We intend to pay a larger first dividend for the period from the completion of this offering through March 31, 2007.

Our dividend policy is based on the cash flow profile of our business. We generate significant cash flow from leases with a diversified group of commercial aviation customers. The distributable cash flow on which we focus is derived principally from our minimum contracted lease rentals, reduced by our net cash interest expenses, cash selling, general and administrative expenses and cash taxes.

We intend to distribute a portion of our cash flow to our shareholders, while retaining cash flow for reinvestment in our business. Retained cash flow may be used to fund acquisitions of aircraft and other aviation assets, make debt repayments and for other purposes, as determined by our management and board of directors. Our dividend policy reflects our judgment that by reinvesting cash flow in our business, we will be able to provide value to our shareholders by enhancing our long-term dividend paying capacity. Our objectives are to maintain and to increase distributable cash flow per share through acquisitions of additional aircraft and other aviation assets beyond our Initial Portfolio of 41 aircraft. We cannot assure you that we will be successful in achieving these objectives.

The declaration and payment of future dividends to holders of our common shares will be at the discretion of our board of directors and will depend on many factors, including our financial condition, cash flows, legal requirements and other factors as our board of directors deems relevant. Please read ‘‘— Possible Changes in Quarterly Dividends’’ below, as well as ‘‘Risk Factors,’’ for a detailed discussion of these factors.

Possible Changes in Quarterly Dividends

Our goal is to increase our distributable cash flow per share through accretive acquisitions of additional aircraft. If we are successful, our board of directors will consider an increase in our quarterly dividends. Our plan, however, is not to increase dividends unless the board concludes we are retaining adequate funds in our business to assure that we maintain our asset base and our long-term dividend paying ability. Assuming we continue to make regular quarterly dividends of $0.47 per share, we may not retain sufficient amounts to ensure that we are maintaining our asset base. As a result, it is likely that we will not increase our dividends until we have made accretive acquisitions.

There are a number of factors that could affect our ability to pay dividends. For example, if we are not able to refinance the notes issued in the securitization before the principal thereof begins to amortize, our ability to pay dividends will be adversely affected if we have not developed sufficient additional sources of cash flow by then to replace the cash flows that will be applied to such principal payments. Commencing after the end of the fifth year after the issuance of the notes in the securitization, we will be required to apply all available cash flow from our Initial Portfolio to repay the principal amount thereof on a monthly basis, and commencing after the end of the third year after such issuance, we will be required to repay $1,000,000 of the principal of the notes on a monthly basis. Other factors that may cause you not to receive dividends in the expected amounts or at all, include, but are not limited to, the following:

•  lack of availability of cash to pay dividends due to changes in our operating cash flow, capital expenditure requirements, working capital requirements and other cash needs;
•  our inability to make acquisitions of additional aircraft that are accretive to cash flow;
•  application of funds to make and finance acquisitions of aircraft and other aviation assets;
•  reduced levels of demand for, or value of, our aircraft;
•  increased supply of aircraft;
•  obsolescence of aircraft;
•  lower lease rates on new aircraft and re-leased aircraft;
•  delays in re-leasing our aircraft after the expiration or early termination of existing leases;

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•  impaired financial condition and liquidity of our lessees;
•  deterioration of economic conditions in the commercial aviation industry generally;
•  unexpected or increased fees and expenses payable under our agreements with GECAS and its affiliates and other service providers;
•  poor performance by GECAS and its affiliates and other service providers and our limited rights to terminate them;
•  unexpected or increased maintenance, operating or other expenses or changes in the timing thereof;
•  a decision by our board of directors to modify or revoke its policy to distribute a portion of our cash flow available for distribution;
•  restrictions imposed by our financing arrangements, including under the notes issued in the securitization, our credit facility and any indebtedness incurred in the future to refinance our existing debt or to expand our aircraft portfolio;
•  changes in Irish tax law, the Irish Treaty or our ability to claim the benefits of such treaty;
•  cash reserves established by our board of directors;
•  restrictions under Bermuda law on the amount of dividends that we may pay; and
•  the other factors discussed under ‘‘Risk Factors.’’

Our growth strategy contemplates that we will fund the acquisition of additional aircraft and other aviation assets beyond our Initial Portfolio through a combination of retained cash flow and debt and equity financing. If financing is not available to us on acceptable terms, our board of directors may determine to finance or refinance acquisitions solely with cash from operations, which would reduce or even eliminate the amount of cash available for dividends.

We will be a PFIC, and our dividends will not be eligible for either the dividends-received deduction for corporate U.S. holders or treatment as ‘‘qualified dividend income’’ (which is taxable at the rates generally applicable to long-term capital gains) for U.S. holders taxed as individuals. U.S. holders that make a QEF election will not be subject to U.S. federal income tax on dividends and will instead be taxed currently on their pro rata share of our ordinary earnings as ordinary income and a pro rata share of our net capital gain as long-term capital gain, and generally capital gain from the sale, exchange or other disposition of shares held more than one year will be long-term capital gain eligible for a maximum 15% rate of taxation for non-corporate holders. U.S. holders who make a QEF election may be required to include amounts in income for U.S. federal income tax purposes in excess of amounts distributed by us. See ‘‘Taxation Considerations — U.S. Federal Income Tax Considerations.’’

As a Bermuda company, our ability to pay dividends is subject to certain restrictions imposed by Bermuda law. For a discussion of these restrictions, see ‘‘Description of Share Capital — Dividend Rights.’’

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CAPITALIZATION

The following table presents, as of September 30, 2006, (1) the historical capitalization of our predecessor, and (2) our unaudited pro forma cash and cash equivalents and capitalization, assuming the following:

•  the completion of this offering at the assumed initial public offering price of $22.00 per share, the midpoint of the range set forth on the cover page of this prospectus;
•  the completion of the concurrent private placement of shares to GE;
•  the completion of the securitization;
•  the acquisition of the aircraft in our Initial Portfolio as described under ‘‘Use of Proceeds;’’ and
•  no exercise of the underwriters’ over-allotment option.

The information presented below should be read in conjunction with the sections of this prospectus entitled ‘‘Use of Proceeds,’’ ‘‘Unaudited Pro Forma Financial Statements,’’ ‘‘Management's Discussion and Analysis of Financial Condition and Results of Operations,’’ and our predecessor combined financial statements together with the notes thereto.


  September 30, 2006
  Historical Pro Forma
  (Dollars in thousands)
Cash and cash equivalents $
$ 43,633
Debt  
 
Securitization notes, net of debt issuance costs(1) $
$ 795,388
Total debt
795,388
GE net investment 1,067,430
Shareholders’ equity
488,533
Total capitalization $ 1,067,430
$ 1,283,921
(1)    See ‘‘Description of Indebtedness — Securitization.’’

A $1.00 increase (decrease) in the assumed initial public offering price of $22.00 per share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) the net proceeds to us from this offering and the concurrent private placement of shares to GE by $30.0 million. Such an increase (decrease) would have no impact on our pro forma cash and cash equivalents, but would increase (decrease) our pro forma total shareholders’ equity by $3.7 million, and would increase (decrease) our pro forma total capitalization by $3.7 million.

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SELECTED HISTORICAL COMBINED FINANCIAL AND OTHER DATA

The following table presents selected historical combined financial and other data of our predecessor, which reflect the combination of the aircraft included in our Initial Portfolio and the related leases as owned and operated by affiliates of GE during each of the periods presented. Our predecessor combined financial statements reflect the results of each of these aircraft and the related leases from the date that each such aircraft was acquired by an affiliate of GE.

The selected historical combined financial data presented below as of December 31, 2003, 2004 and 2005 and for each of the three years in the period ended December 31, 2005 have been derived from the audited combined financial statements of our predecessor included elsewhere in this prospectus. The selected historical combined financial data presented below as of September 30, 2006 and for each of the nine-month periods ended September 30, 2005 and 2006 have been derived from the unaudited condensed combined financial statements of our predecessor included elsewhere in this prospectus, which have been prepared on a basis consistent with the predecessor's audited combined financial statements. The selected historical combined financial data of our predecessor as of December 31, 2002, and for the year then ended, have been derived from the unaudited combined financial statements of our predecessor company not included in this prospectus, which have been prepared on a basis consistent with the predecessor’s audited combined financial statements. Selected historical combined financial data of our predecessor as of December 31, 2001 and for the year then ended is not provided because combined financial statements for the predecessor as of dates prior to January 1, 2002 and for periods ending prior to such date cannot be prepared without unreasonable effort or expense.

Our predecessor’s combined financial statements have been prepared on a carve-out basis and do not reflect what our results of operations, financial position and cash flows would have been had we operated as a separate, stand-alone company during the periods presented, or what our results of operations, financial position and cash flows will be in the future. Instead, this financial information represents the combination of results attributable to the aircraft included in our Initial Portfolio as managed, financed and operated by GE and its affiliates.

The following data should be read in conjunction with ‘‘Risk Factors,’’ ‘‘Use of Proceeds,’’ ‘‘Unaudited Pro Forma Financial Statements,’’ ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations,’’ and the combined financial statements of our predecessor company.

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  Years Ended December 31, Nine Months Ended September 30,
  2002 2003 2004 2005 2005 2006
  (Dollars in thousands)
Statement of income data:  
 
 
 
 
 
Revenues  
 
 
 
 
 
Rental of flight equipment $ 57,937
$ 80,118
$ 99,414
$ 117,861
$      86,989
$ 111,603
Expenses  
 
 
 
 
 
Depreciation of flight equipment 21,844
29,321
35,005
42,462
30,611
37,396
Interest 20,396
25,700
28,680
34,995
25,232
33,161
Maintenance expense