Q1 2020 Earnings Call
Good morning, ladies and gentlemen, and welcome to the flight, leaving estates quite <unk> at this time I'll participant I know listen only mountain made a little bit conductor question answer session and instructions will follow at that time.
If anyone should require assistance during the conference. Please press item zero on your touch tone telephone.
As a reminder, this conference call.
It's being recorded I would know like to kind of kind of went over to your host Mister <unk> third the floor is yours.
Thank you and good morning. This is Matt Dallas, the Investor Relations manager at fly leasing and I'd like to welcome everyone to our first quarter 2020 earnings conference call.
Why leasing, which we will refer to as fly or the company.
Issued its first quarter earnings results Pressrelease earlier today, which is posted on the company's website at fly leasing dot com.
We have a slide presentation that accompanies today's call, which is available to participants on the web cast.
If you are not accessing the web cast you can find a copy of today's presentation in the Investor Relations section of our website on the events in presentations page.
Representing the company today on this call will be column Barrington, Our Chief Executive Officer.
Julie rule, our Chief Financial Officer <unk>.
<unk>, the president and C.E.O.B. ban the company that managers and services flies fleet.
This conference call contains forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Forward looking statements include but are not limited to statements regarding the outlook for the company's future business and financial performance.
Forward looking statements are based on the current expectations and assumptions that flies management, which are subject to uncertainties risks and changes in circumstances that are difficult to predict.
Actual outcomes inmate results may differ materially due to factors that are summarized in the earnings press release and are described more fully in the company's filings with the S.C.C.
Please refer to be sources for additional information.
An archived web cast of this call will be available for one year on the company's website.
And with that I'd like to hand, the call over to column Barrington C.E.O., a fly leasing column.
Thank you ma'am and welcome everyone and thank you won't for joining us this morning.
Yeah, that'd be an pretend to time in global aviation <unk>.
Covert dashed 19 related knockdowns travel restrictions consumer fears have itself the airline.
<unk>.
Operations being severely reduced.
But the airline support the traffic statistics for April.
This in terms of passenger numbers.
Major airlines already reporting passenger traffic.
2%.
Levels they carried in April 2019.
Up to several excellent youth radiation, leading up to and through 2000 at 19.
Facing on President time in 2220 is likely beyond.
Once again, it's just a world event not directly related to aviation that has caused the virtual cessation to then on operations.
You can move to the globally across seat, but done to teach nailed to listen to the airline employees and hemorrhaging feline liquidity.
Well I started out looking like another very positive.
<unk>.
Looks like a real struggles for the industry in for all its participants, including airlines <unk> and manufacturers.
And despite halon, making strong emphasis to shore up their liquidity.
Then you won't be able to do so on their own.
Positive news is that many governments are aware of the gravity of the situation.
The importance of aviation to national and global economic recovery.
The result of providing significant financial systems to airlines.
Hopefully this assistance would be not too many airlines to subdivide the current crisis.
Ramp up their operations when travel restrictions lifted and consumer interest returns.
The reason loosening of restrictions on movement in some jurisdictions. The response of the populations to their restored freedoms, but some hope it's once the virus has a basement or a vaccine rather effective treatment to be developed.
He returned towards previous travel passions.
We'll be watching these trends intently.
Yeah, obviously have great concern some sympathy from thousands of people who are very lost their jobs amongst our airline times.
So those who contracted the virus.
All our colleagues, it's nine p. bound to well.
Opted to the requirement to work remotely.
What are the features of our business as many of US are conditioned to working away from an office environment.
Restrictions on travel and certainly a challenge to us.
But fly support it not a quarter of excellence financial results either overshadowed by the importance of <unk> next to the virus.
Fortunately flies <unk> was designed to stand industry downturns.
Provide a high level of protection to various cycles.
What is impossible to protect fully against the Lockdowns. We experience you today, we believe that our strategy, which we've applied consistently gives us a level of protection and colored buttons that flight would suffice occurred in crisis situation.
First atrocities been based in concentration of portfolio.
Widely used aircraft type.
Finally popular narrowbodies.
Expected the demand for relatively new mid like eight sweet twenties, and seven to seven next generation aircraft, which one this quarter flights fleet will be the first recover.
Let's see the aircraft satisfied domestic and regional.
<unk>.
The demand for these aircraft would likely be strengthened by lower fuel prices.
Secondly, it's nice consistently skewed, making specter aircraft orders for the manufacturers.
Basis, we couldn't predict the demand at least 10 threat cropped will be delivered several years out.
Thing environment at the time of delivery.
Fly has no aircraft orders from the manufacturers.
A few to Capitol commitments have always been selected and have generally been made in conjunction with our airline customers to purchase at least back transactions.
What is unfortunate that current conditions resulted in the suspension if I purchased leaseback transaction for eight 320 news.
It does mean, that's nice no capital commitments in 2020.
And thirdly fly it's always adopted the conservative financing strategy based primarily on long days a desk.
Ties is brought the line of the depreciation of aircraft.
No significant desperate <unk> refinancing onto the fourth quarter of 2221.
Flies also fortunate to Dennis the experience of the beat them team.
Which is more than 30 years experience as <unk> separately industry crises.
BBAMS the food service cloverleaf manager, that's strong and positive relationships with most of the world's airlines and financing institutions.
<unk> is a very strong talk to help fly navigate through the present the situation.
The beat on teams activity now dishing up portfolio and emphasis on the hunting liquidity and protecting asset value.
Like most less those we have already received rent a fair requests for most of our less ease.
<unk>, representing about 70% annualized contracted rents.
While you were still in discussion with many about 40 lessees expect the outcome to provide for the favorite period of less than four months I preferred amounts to be repaid <unk> seven months.
Julie would expand the yeah implications on the <unk> makes when the call.
I'd like to emphasize that there was a strong alignment of interest being flying p. them into competing these arrangements.
<unk> of the terms of its servicing management agreements with fly to treat each of its clients that preference.
In addition, BBAMS shareholders, now and 23% applied shares.
Which is the largest insider holding of any public aircraft that so.
Atrocity is paste, that's not strong position to protect fly from the present challenges.
The end of March.
I had cash and unencumbered assets approximately $900 million.
I'm, just drifted cash for $361 million.
Encumbered aircraft to $560 million.
To put these amounts into perspective.
The March quarter flies annualized operating meets went for revenue is about $325 million.
And our interest in <unk> next 12 months tokens about $250 million.
Gosh.
A quarter Endorphin annual average was no time load two <unk> 2.1 times net debt to equity.
<unk> 4.5 years with no near <unk> refinancing needs.
That's been to Dahlia with no orders from the aircraft.
There was no predelivery payments tied up with them.
This is just shown improving the financing flexibility and strong track record a depressed financing sauces.
[laughter].
No major portfolio acquisition in late 2018, weeping purposely strengthening slides balance sheet.
<unk>, adding to our cash adult encumbered assets by reducing your financial leverage.
This is being a cheap principally through our aggressive savings program.
How does it down to to reducing messy concentration.
For March 2019 to March 2020 week increased alright, unrestricted cash and unencumbered aircraft by more than 40%.
$651 million to $921 million.
The same period, we reduced our net debt to equity from 3.4 times to 2.1 time.
I noticed 11 and the company's history.
Flies reporting another very good quotient financial results.
Julie we'll take it to the detailed financial placement cool.
But here are some headlines from the quota.
I tend to wrap news $122 million a list of behind lost his queue one.
<unk>.
84 aircraft value at three point no billion dollars this year compared.
Compared to 103 aircraft value to $3.5 billion.
So if you wanted husband 19.
Or just <unk> $44 million.
Corresponded to one dollar and 42 cents per share.
Similar to last year as one dollar and 44 cents per share.
Made a gain $31.7 billion for the sake of six aircraft in two engines.
We haven't adjusted return on equity 20%.
<unk> <unk> <unk> digits or Louise.
Increased a book value per share $29 and 21 seven.
Increase of $6 ones 47 cents.
8% the 12 months since March 2019.
I was also the quarter continued to affect the significant developments fly three years.
Selling a loser performing aircraft.
Optimizing on capital structure, and most importantly, upgrading off each with newer and more profitable aircraft.
These into C. test with focus in good stead.
Whether these challenging time.
Yeah.
In the quarter fly sold six aircraft and two engines were told to gain at $1.7 million.
After 10% to 20% premium to the book value is D.S. it so.
The average age the assets over 10 years.
The engines that'd be pretty attached to an Airbus eight 319 <unk> in the pre school.
And the quarter fly quite 1.737 next generation.
<unk>.
Acquisition of to bore 737, and cheese bassoon contracts that we entered into last year.
Meanwhile, and is widely reported the industry media.
No such will not be taken any more eight 320 neo deliveries this year.
That's why I proposed purchasing these that transaction, hoping to third at least beyond 2020.
Now, we do not know if or when deliveries to air age will resume as we remain constant communication with the on line.
No further commitments to purchase aircraft.
But that's what time do to Julie take it to the coupon financial results in detail Julie.
Thank you column.
Clients reporting that income 38.1 million or $1.24 per share for Q1 2020.
We were 17.2%, marking the eighth consecutive quarter of double digit Arlene.
We are pleased with these solid financial results, which include a gain on the sale of six aircraft two inch inside a significant premiums about value.
We continue to believe the quality of earnings is strong.
Even started by flies increased not spread.
[laughter].
On the rubbing side flies operating least rental revenue and Q1 2020 decrease to 85.5 million given by the sale of 41 aircraft since the beginning of 2019.
That's column mentioned it to cover 19 crisis me expand expect to grant some rent deferrals. However, we really didn't see any impacting q. wine.
Expect the vast majority of right deferrals to conclude within this year.
Back to agree to approximately 90 to 95 million of rent the for all from the second three or four quarters.
However, we generally do not expect things right deferrals to reduce recorded least rather than you provide a collection of runs continues to be reasonably assured.
Just because under gap total rents are determined to Lisa recognize on a straight line basis, accordingly changes to the timing of cash receipts, such as <unk> range minutes, well not affect the total amount of consideration to be received hundreds obese and therefore I do not typically impact revenue recognition.
Total revenues were 121.6 million and keep 120, 25 recognize 2.4 million attentively income related to to scheduled space exploration.
I recognize 31.7 million of games on the sales aircraft, which represents a 20% premium isn't that the value.
Aircraft sales over the past five quarters enable give averaging and reduced plessy concentration and also belt applies cash balance all of which puts us in a stronger position today at any time in our history.
Turning can expenses.
Depreciation and interest expense, both decreased as compared to the par you're quarter due to aircraft sales.
In addition to the lower debt levels due primarily to aircraft sales interest expense also declined as a result are they lower weighted average cost of debt.
And she knew expensive down 1 million and Q1 as compared to Q1 2019 due to the smaller fleet.
Also thank you 120, 25, recognizing unrealized loss of 9.4 million to write marketable securities down to estimated fair value.
This expense item relates to flies investment in the equity traunch of aviation A.B.S. vehicles, commonly referred to was you know.
Falling that's right down wise investment he notes, it's 6.6 million as of March 31st.
These securities are required to be market share value each quarter, what's your name, resulting teacher income statement volatility.
There were no aircraft impairment charges in Q1, and I will go into more detail about that now.
First a reminder, that under gap the undiscounted cash flow of an asset over it's expected life or compared to it's not book value to determine if the outside is impaired.
We expanded our impairment analysis quarter and reviewed estimated cashless for over 90% of our fleet.
Our analysis resulted in no impairment charges this quarter.
We will continue to monitor for changes in circumstances, principally changes to ask me to cash that streams that maybe indicators of potential impairment.
We are highly focused on liquidity during these on certain times.
Our current unrestricted cash balances sound and it's calling stated earlier, we have no near term debt maturities.
2020 debt maturities are minimal and there are no significant balloon payments due until the end of 2021.
We've also reduced our cost of that whether active liability management efforts continue and consider our refinancing rest to be mitigated due to the level of secured that that we have which is advertising.
I'd like to conclude with a quick no regarding our expectations for next quarter's financial results, which we have typically provided on our quarterly calls.
While we believe many of our income statement line items for named largely predictable you believe it is prudent to not provide any Q2 guidance at this time given the rapidly evolving nature of the cover 19 crisis.
Alternate back to call him now first closing remarks.
I could Julie.
Summary, flies then he'd offenses as we face the current difficult industry conditions.
Ample liquidity and unencumbered assets that long days, it's Nancy with no near term <unk> refinancing requirements.
<unk> requirements no commitments to aircraft manufacturers.
With Martin feats of predominantly never been the aircraft on these two a diversified group of airlines worldwide for which 50% of our renter revenues are represented by like carriers <unk> U.S. Major airlines.
And finally, we benefit from the world, leading an experience management provided by the beep and team.
Navigation through several global crises.
You can call a numerous industry contacts as required.
Oh, you will have to face rough waters for the coming months flies a strong armory protections to help us navigate through them.
And now we can take your questions.
Thank you said, ladies and gentlemen, if you have across one at this time peace process store. It then the number one key I get touched on top of sound again that started than the number one key on your touchstone telephone. It gets some has been and say Oh, you're whichever of yourself from the queue. Please press the pound key.
My century can't first question will come from the line of Miss Catherine O'brien symbols and Fox, maybe a line of July 15th.
Good morning. Thank you everyone from the time hope you and your family's all doing well.
The first one just on on the deferral commentary I think he said.
Impact <unk> generate 70% of your rather than you, but you know most of the industry that we've heard some so far it's not the deferrals or not equal to 100 per cent of rented usually some portion of monthly run.
Can you help us screen, you know what percentage of revenue right now it's potentially impacted understanding it's it's a castle in time, not really <unk> as of yet thing.
I think <unk> I think Julie gave some country that Julie do you want to just respond to Catherine on that one.
Yes, hi, good morning, I'm thinking for the question.
Yeah, I think I side, and and my comments that we expect 90 to 95 million deferrals. This year and keep in mind that somebody's discussions are ongoing in in process. So these are our our estimates at this time <unk> and if you compare that to the 325 million of annualized operating lease revenue.
<unk>, we're in 30% to 35% range of.
Contracted France that we are expecting to grant some to for all fine.
Okay understood apologies I'm getting some weird you back then must Miss just maybe a follow up on the deferrals night and then I have one more you know are you want the point, where any of your life stores have have or excuse me <unk> have started to repay normal rate you know, maybe some airlines out of Asia.
The deferrals started a couple of months ago, just trying to get a sense of you know where you are in the cycle, where you maybe expect where your current expectation on on collection, well bottom and then and yeah. That's it for them.
I think Steve see you might like to respond to that one.
Sure.
Captain and we had a.
Handful of Airlines Asian that came early in the crisis.
Asking for referrals, but at the end of the day decided they didn't need them.
And they're paid on schedule.
And I'll add that post post a crisis in fact, we've extended to aircraft.
Decent niece rates for six years.
So it's not all bad news, it's it's more of a mixed bag a ball.
Activity out there.
Okay got it.
And then maybe just on me varies aircraft I understand you know that P.B.D. on on one of those deliveries will restart, but just maybe two questions on that first you know.
There's no penalty to fly for the for all his right that would that would be areas negotiations with Airbus and Nandini. Second question. You know I think it's been depressed that feed down has done you know potentially down the salaries that transaction with Delta on aircraft is currently <unk>.
Why be participating or or do you expect applied to potentially you only incremental aircraft that yeah. The Phillies market. This year. Thanks, so much trouble.
Do you want to take them a little too.
Sure. So what's the respect to Airasia as you know if they've made a a statement they will not be taking.
They're neos until growth from <unk>.
And all of our transactions are derived directly through where he said not directly with Airbus.
Syllables or so he stock transactions as column in mentioned that has prepared remarks.
You're not taking any.
So leasebacks this year and we stand.
Well reconsider the transaction 2021, 23 and beyond.
So that's an evolving.
Schedule now and we'll work with arranged on that as it as it develops.
With respect to.
The transaction with one of our major clients in North America.
<unk> and not fly BBAMS did transactable very large transaction early in the crisis as well. It's just one of our clients. That's one of the beauties of the a platform is that we can access very large deals and as we see opportunities our capital partners.
Then allocate those deals we did not allocate.
Feels to fly.
Not because we didn't have the capital and we didn't want to grow and we certainly do you want to do that but we thought it was just too early in the crisis.
For public entity to be a spending its capital until we can see what this recovery looks like so as opportunities come along and you can use the strength you damn platform you can expect to see fly.
Participate and some of those deals.
Okay that makes a lot of sense appreciate that and vagueness me I've got to make sure like to there's there's zero record to fly for areas decision to push those delivery thousand that's an area.
Discussion right.
<unk> Oh.
<unk>. Thank you so much rather color.
Thank you ma'am.
Centered your next question that come from the line as Mister <unk> like to bag. So you align it sounds like we used to see.
Hey, good morning, guys. He just had a couple of questions here as well. The first one is I guess what factors are you using the never to determine whether to grant at least it for girls and what.
Level of girls to grant to somebody's customers.
Do you want to go in that one too.
Yeah, 'cause short little thank God, you're saying what levels of the falls on airlines asking for.
Sorry, let me just to say that again, what factors are you using older determine whether to grant deferrals, then how do you guys kind of approach that process.
Well, obviously the big one is the viability of the airline going for right.
So we pretty much use three metrics as we evaluate the situation one is near term liquidity.
Whether they had enough near term liquidity to get to the end of the year.
And then the second and third or.
Sure that we we we evaluate it was government support.
And shareholders support in the form of what lovers, they could pool in the event they needed more liquidity.
To get past the crisis.
Those are the three key metrics, obviously, there were other things that went into that evaluation such as near term maturities.
<unk>.
And obviously their their fleet strategy.
Got it and then just as a follow up and then you do have an option book on some neos as well, which.
I don't think is associated with their Asia, making decisions.
You just kind of walk us through the process on that and when you have to make some of those decisions.
Yeah, So <unk>, we'll remember from par calls.
We have 20 options.
But we July.
Or Asia on <unk>.
Early on a year and a half ago, we exercise some of those options.
But erase it did not have Ah aircraft available to fulfill that agreement.
So that it that part of the transaction is in suspension until.
Figure out.
What aircraft are available and what future growth looks like so there is no obligation on behalf of fly or.
But to pick up any.
Auction aircraft at this point.
Great. Thanks like.
Yep.
Thanks.
Do next question, sometimes they'll come from the line of MS. Helene that there's some talent made me a line is their lights needs to see.
Thanks, very much operator high everybody on thank you very much for the time I just have a couple of questions on I think slide number.
19, so kind of later in the presentation you have some aircraft out to Alaska Air Our day 73733 twenties work eight recently ones and are they coming if there are the 320 or are they coming back to you.
Steve.
[laughter] Yeah I've.
It is it's an 80 320, Hawaii.
And I believe the X. free on their preferences 2023.
So we don't have any near term disability on Alaska airlines or desire to keep or get better aircraft back at this point.
Okay. That's that's good to know it's a longer dated lease and then the other question I don't know if calm or or you want to answer this but air India.
It's a big client for you and obviously those leases are guaranteed by the government, but just kind of wondering how you're thinking about you know your portfolio of [noise] lessees in this environment. I mean is this an opportunity for you to upgrade.
Client list.
In in some parts of the world and maybe shift exposure around from.
You know some places that might be more risky going forward to places that might be less risky and and be do you have any concerns about those specific air India aircraft.
Steve again, I think that's your area.
<unk> a really good question, so I think those.
Two observations I would make one is.
Fleet fly is about 60% of net book value in Asia.
Asian went through the crisis earlier than anybody else.
And we expect agent to recover before anybody else. So in that respect we think we'll get to this quicker than some of the other less or just given our exposure to Asia.
The other observation I would make is that the animal instincts and commerce in Asia is problems falling lived in other parts of the world So as fear subsides.
And just calling mentioned they get some antiviral vaccine develop we expect traveled to bounce back a lot single in that part of the world. So.
In that respect I think we're.
What's that pretty well.
Your second part of the question, which was do we see this as an option to upgrade the quality of our wheat, that's absolutely true, we're saying some of the best cheer one airlines.
Try to access to sell the stock market.
Two a gang liquidity here and we do see this as an opportunity as the crisis unfolds.
The quality of our portfolio. So you can expect to see us play and some some interesting name so so opportunities come along.
<unk> I don't know if you've said this but as you think about those you know opportunities to do sell leasebacks like what are you looking for you.
You know I guess it would be.
Younger aircraft then.
The average age of the corn portfolio and a better yield to then the portfolio or.
Yeah <unk>.
Oh first of all it's.
<unk>, having some view on.
How we think the airline will develop and it's competitive.
Position in the market going forward.
With respect to specific deals we are looking for younger aircraft.
With very long selling spectrums.
But having said that we're not shy on doing some short term deals as long as the rest of reward.
<unk>.
And.
We do see quite a few opportunities coming up.
But keep in mind that a lot of the major less source I see to further orderbook, we're probably going to enter.
So he's back market to show some growth so it may be somewhat more competitive <unk> like.
And then and then just my my.
My last question on the 2021 notes, they're doing October and I'm, just kind of wondering how I.
I mean, obviously you don't have to worry about that for you know whatever 18 months, but how far in advance would you consider.
Going into the market to refinances word push the maturity Dietz out I mean, you've got I'm looking up slide 15, and you actually have a pretty good.
You know repayment schedule for the next five years till you get to like 24 and five but.
Next year, you know obviously in to your point earlier, it's fourth quarter. So how how early in in 21 would you start to think about pushing those forward.
Well <unk>, we've shown over the years that we've been pretty flexible in terms of.
Financing and refinancing so we're looking at all options I've up today.
No, but the markets are pretty turbulent right now so it's because of the virus. So I think we'd have to wait for a little while until things settle but certainly we will be looking at on options as of now a right to that for dancing date refinancing date. So.
And I expect because we will do something between this and then.
Right Gotcha Okay.
No rush. So thank you. Thank you very much for your hope guys enjoy thankfully this afternoon of course I'm too.
Thank you.
Thank you ma'am and dissenters. Your next question it'll come from the line of Cheney Baker from T.V. My game. So your line is not life pleased to see.
Good morning team can you hear me okay.
Perfectly Jamie high grade Hi.
My first question, probably won't come as a huge surprise what are your thoughts on accepting equity in lieu of rents and have any of your more challenged airline customers.
You know made any proposals in this regard.
Steve do you want to talk about that one.
Well, Hey, Hey, Jamie Steve.
No none of our heartless you'd have offered a such a mechanism.
Yeah, what we consider it unlikely we are less aura, we want to stay pure rustle us or but there may be circumstances, where.
Do you know would fall into the exception basket and you probably are referring to the Norwegian deal.
That means for the marketplace.
So I would say in general.
Nonstarter, but there are some interesting.
I wouldn't say opportunities, but possibilities out there that you know we might change our mind on so I think we stay open to it.
Okay.
I'd ask and second and this is a different question.
Well, that's good disclosed that they'd gotten up at 12 months of pain relief from some of their less or as you know but.
<unk>.
This earning season is that you know three and occasionally six months Reprieves are really all that's being given out.
And and you know of course your disclosures. This morning, I'm not asking you to name names.
I'm just curious I mean this evidence of the divided.
Queen better platforms like yours, and weaker platforms. <unk> can you think of something structural that I haven't thought of you know I haven't really been able to get any Colorado, Alaska on this I would just.
Somewhat puzzled in alarmed.
The up to 12 month reprieve is being offered.
Do you Wanna commented that would also started Jamie look.
Across the <unk> you know we have 525 aircraft some 90 lessees.
Those 90, <unk> I'm going to save it worked free.
That request is longer than a three month referrals.
And all three of those been Tonight.
Look I think all less source or.
In a position where they want to help their clients get to the crisis, but we're not a long term provider of liquidity.
They need to fix their balance sheet and then we have to assess viability from there. So I think requests for that type of log to fall is out of bounds. Okay.
I appreciate that disclosure, that's actually really really helpful. So I'm glad I. Thank you everybody thinking.
<unk>.
Thank you Sir the sentence in next question will come from the line of Mr. Dog Wonderful <unk> see a line is alive. Please P.C.
Yeah. So thanks very much for taking the question a couple of questions can you give us an idea of your I'm committed lease rules on 2020 and 2021.
Sorry can you repeat that.
Your lease expirations and 2020 and 2021.
Okay I think that's shown in slide 21 of our presentation.
I apologize.
Having some technology problems here.
Okay, we have three in 20, representing 3% of a feat.
Oh.
<unk> sending 9%.
[noise], great and you mentioned that to lease rentals had actually been renewed maybe it's too granular of a question, but can you give us an idea of what you may have gotten on those least rental renewals verse, what you might have expected a few months ago.
<unk>.
Comment on your expectations for [noise].
<unk>.
Oh look like all these extensions of the discussions predate the crisis white.
And both of the airline that extended stood up to the word and did not renegotiate post the crisis.
Which we respect and fruit shape because that's the way this is should be conducted.
And those least rates renewals reflect pretty to crisis as we go into the crisis.
And we swayed soften you can expect I don't know I'd say five to 10 per cent haircut.
As we navigate through this.
But as I said my earlier remarks, I do think given that 60%.
In Asia, we think the rebound there is going to be a lot stronger than other parts of the world and at least <unk> from there before they from other places.
Great and your financial says a note that says no aircraft are held for sale as of March 31st does that imply that all the airplanes and the A.B.S. transaction have been no evaded.
Yes, all have been all it being transferred over at this point in time.
And a last question to the write offs on the aircraft A.B.S. extend across each of the aircraft A.B.S. transactions and was it roughly proportional.
Julie do you want to comment on that one.
Yes, hi, yes, it is across the the transactions.
Yeah, roughly in the same range of write downs percentage right now.
And you said on the call. It sits now $6.6 million is the value of the equity.
The after the right.
Yes, that's what we have remaining.
Thank you very much.
<unk>.
Thank you Sir.
Getting next question will come from the line as Mister <unk>. Some Barry Seal line is alive. Please proceed.
Thank you calm and Julie if I Wonder if you could go through and just Kinda review, what what aircraft types do you have in your unencumbered assets.
Oh.
Yeah, I know, we have a list of the month does it doesn't come immediately to hand, but it's it's mainly a narrow bodies.
I think might be only.
Mm.
Not really could easily not into this.
Can even one second.
It is <unk>.
Yes, yes, I think that's correct.
I'm, sorry, mainly mainly narrowbodies, okay, yeah in the average age in.
<unk>.
Oh.
No I I can I can help you with that it's it's all narrow bother you [laughter], yeah, I've heard a distance from.
<unk>.
Who 2019, there's one neo in there.
And they're all.
Eight 320.
21, Neos seven to seven 800.
And a 319 one okay.
It's perfect. So that so next fall a question is if you needed additional liquidity is this an option that you would consider.
And under what circumstances would you would you go ahead and and maybe go ahead and convert that into a financing and this goes back to an earlier question I believe <unk> on the six and three eight to 21.
I can you.
By that question.
Would we use those aircraft assets to secure wore a refinancing yeah for a refinancing of this 16 three it's I mean, I I think the timing in recovery I think I think everybody accepts the fact that it's going to be uncertain. Just in terms of its pace and so if we did get down to it and and we were in in a <unk>.
Curious position. This time next year would that be used as maybe part of a refinancing for the six and three eight.
If we have to yes, definitely there's no doubt about it that's what those aircraft, they're all encumbered and we would certainly be glad to income, but those in order to generate liquidity too refinance another facility. If if that's what's required definitely okay, but it sounds like there's no current plans at all to do that would it be correct calm the in that.
Yeah, I mean look <unk> right now so we think the dust from settled over the coming months and then we will you know we're certainly we continue to explore all possibilities, but we take them more possibilities will emerge as as the top dust settles over the coming months.
Okay. So next question I have has to do with are you using any of the security deposits from any of your lessees kind of in lieu or as part of a deferral arrangement and if so what maybe any color there would be greatly appreciated.
Julie doing a comment on this.
Yes.
Stage, we're not contemplating using security deposits to offset.
The rent referrals.
It's not been part of our arrangements it today.
In the event that we would use any security deposits they'd have to be replaced with a letter of credit or an arrangement to replace that the cash security deposit at some point.
Okay, and then last question I'm, just confirming you haven't repossessed any aircraft at this point from any of your lessees, but it'd be correcting that assumption.
You want correct, we have enough repossessed any aircraft.
Okay. Thank you very much really do appreciate the color on the answers.
Thanks, So cool.
Thank you Sir and different if you did you have to follow up questions from his Catherine O'brien, If Goldman Sachs now these fussy.
I get everyone. Thanks, Thanks for the additional time, so maybe one for Julie.
I'm pretty sure that you're the other assets on on your balance sheet or primarily driven by you know the value of that.
<unk> Orderbook portfolio.
Any thoughts on it you know the the the deferment of those orders in high that balance sheet figure you know any any risk of right down there. Thank you so much.
Hi, Yes, we we have we looked at that at the corner and and you know this stage, we are expecting knows aircraft to deliver.
Deliveries just to be delayed so don't anticipate.
At the current time any right down about asset.
Okay, great. Thank you very clear.
Mm.
Thank you ma'am and the centers I am showing no further questions. At this time, thank you and I would like that <unk>.
Thank you everyone for joining us for our first quarter earnings call. We look forward to updating you again next quarter you way now disconnect.
Thank you Sir and again, thank you everyone for participating that's been good stays constant c. may not disconnect stay safe I'm have a lovely day.
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