Willis Lease has closed on 12 aircraft and 13 engines at about $262.9m against a base price of $379.3m, and the release announcing it gives no price at all

The press release runs to about a page and never says what the deal cost.

Willis Lease Finance announced on Tuesday morning that it had closed the purchase of 12 commercial aircraft and 13 spare engines. The Form 8-K that carries the release as an exhibit, accepted by the SEC at 07:09 Eastern, has the number in its own body: an adjusted price of approximately $262,900,000, against a base price of $379,300,000 disclosed when the agreement was signed on 10 July.

The gap is $116.4m, or 30.7 percent of the base.

Why the price moved

It is not a discount, and the filing is precise about that.

The base price was reduced to account for basic rent received, maintenance reserves received, cash security deposits and other revenue received from and after an agreed historical economic closing date. In plain terms, the parties fixed an economic handover date earlier than the legal one, and the cash the portfolio generated in between belongs to the buyer, so it comes off what the buyer pays. The filing does not say what that date was.

Two other mechanisms ran alongside it. Any asset that suffered a total loss, or was removed, sold or otherwise disposed of before closing, came out at the consideration allocated to it, or for certain sales at the greater of that allocation and the third-party sale price. Running the other way, interest accrued to the sellers at 6.25 percent a year from the historical economic closing date through to closing.

What actually reached the sellers is smaller again. From the $262.9m the parties deducted a $10,000,000 deposit funded earlier and released at closing, a $1,517,200 holdback to be held for nine months against pre-closing leakage, and whatever was needed to discharge the target companies' borrowing under an existing credit facility. Certain prepaid vendor costs were added back. The filing does not size the debt, so the cash figure is not recoverable from the document.

What was bought, and where it is going

The buyer is Willis Dallas Ltd., a Cayman Islands company wholly owned by Willis Lease. It took the entire share capital of WNG II Aircraft Leasing (Cayman) Ltd. from WNG International Master Fund II, L.P., and all of the membership interests in WNG Aircraft Management 3, LLC from WNG II Aircraft Management (Delaware), LLC. The aircraft and engines sit under those companies through subsidiaries that include two Irish designated activity companies.

Then there is the sentence the press release leaves out. Willis Lease says it intends to allocate ten of the acquired engines and six of the acquired aircraft to subsidiaries of joint ventures of, or investment vehicles managed by, the company.

That is 16 of the 25 assets. The release describes the transaction as expanding the company's own lease portfolio by 12 aircraft and 13 engines and says nothing about the allocation, which the filing notes had been disclosed before.

The purchase agreement is not public. It is due as an exhibit to the quarterly report for the period ending 30 September. Milbank acted for Willis Lease with PricewaterhouseCoopers on due diligence; the seller used Vedder and KPMG Ireland.