Subsequent Events

9 Months Ended

Sep. 30, 2014


9.	Subsequent Events

The Company has entered into a Framework Agreement, dated as of October 1, 2014 (Framework Agreement), with a bank syndicate which will provide up to $379 million of debt financing for seven Airbus A320 aircraft and three Airbus A321 aircraft scheduled for delivery under the Company's existing purchase agreement with Airbus between October 2014 and September 2015. Each loan to be extended under the Framework Agreement will be funded on or about the delivery date of each aircraft and will be secured by a first-priority security interest in the individual aircraft. Each loan will amortize quarterly on a mortgage-style basis, with senior loans having a 12-year term and junior loans having a 7-year term. Loans will bear interest payable quarterly on a floating rate basis, provided that the Company may elect in advance a fixed rate basis. On October 16, 2014, the Company took delivery of an A320 aircraft financed through the Framework Agreement and recorded debt of $37.0 million in relation to this transaction.

On October 23, 2014, the Company entered into forward interest rate swaps that fix the benchmark interest rate component of the forecasted interest payments on the debt related to three Airbus 321 aircraft with expected delivery dates ranging from July 2015 to September 2015 to limit the Company’s exposure to changes in the benchmark interest rate in the period from the trade date through the date of actual delivery. The interest rate swaps will be designated as cash flow hedges.