I probably purchased some GACF shares from you today as I made a small purchase. I've been really surprised at the selloff today as I thought the PR was bullish. While BCI Aircraft Leasing would suggest that they are a leasing company, I don't recall hearing them ever leasing an aircraft other than to Delta which were aircraft under lease when they purchased them. In my recollection they have only sold aircraft. So, the PR today may represent a real move into leasing. I could be wrong. Here is some text from the BCI web site that suggests that they may be more of a middle man in the actual leasing to the extent that it happens:
"BCI Aircraft Leasing, Inc. is a leading independent lessor to the commercial airline industry. Through its marketing efforts, BCI originates new transactions directly with airlines and acquires aircraft from the portfolios of other leasing companies. BCI finances these transactions with its own funds and with debt provided by commercial banks. BCI then privately invites selected investors to participate in these transactions.
A BCI equity investment features participation in a bankruptcy remote special purpose entity (SPE), insulating investors from other BCI transactions. The SPE owns the aircraft directly or through a trust, and leases it to the airline under a non-cancellable multi-year lease. Every month, a fixed amount of the rent payment is allocated to pay principal and interest on the loan and the balance is allocated to equity investors.
BCI offers its investors a cash rate of return that differs from transaction to transaction, typically between 10% and 15% per year. Investors also share in any residual upside in the aircraft and may realize tax losses derived from the depreciation of the asset using of a 7-year MACRS, double declining method for leases with a domestic lessee or a 12-year straight-line method for offshore lessees.
Investor opportunities in BCI transactions are limited to qualified individuals and institutions. For more information, please contact us."
Mike
AI
