Air Lease Bonds

AL -  USA Stock  

USD 42.39  1.44  3.29%

Air Lease's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. Air Lease's financial risk is the risk to Air Lease stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
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Debt to Equity Ratio is expected to hike to 3.22 this year, although the value of Total Debt will most likely fall to nearly 13.7 B.

Air Lease Quarterly Debt to Equity Ratio

Given the importance of Air Lease's capital structure, the first step in the capital decision process is for the management of Air Lease to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Air Lease Corp to issue bonds at a reasonable cost.

Air Lease Bond Ratings

Air Lease Corp bond ratings play a critical role in determining how much Air Lease have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Air Lease's borrowing costs.
Overall Bond Rating
Average S&P Rating
Piotroski F Score
7  Strong
Beneish M Score

Air Lease Corp Debt to Cash Allocation

As Air Lease Corp follows its natural business cycle, the capital allocation decisions will not magically go away. Air Lease's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors. Many companies eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
The company reports 16.58 B of total liabilities with total debt to equity ratio (D/E) of 2.73, which may imply that the company relies heavily on debt financing. Air Lease Corp has a current ratio of 3.9, indicating that it is in good position to pay out its debt commitments in time.

Air Lease Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Air Lease uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.

Air Lease Debt Ratio

It appears without question that nearly 35% of Air Lease's assets are financed be debt. Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the Air Lease's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Air Lease, which in turn will lower the firm's financial flexibility. Like all other financial ratios, an Air Lease debt ratio should be compared their industry average or other competing firms.
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Air Lease Corporate Bonds Issued

Air Lease issues bonds to finance its operations. Corporate bonds make up one of the most significant components of the U.S. bond market and are considered the world's largest securities market. Air Lease Corp uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most Air Lease bonds can be classified according to their maturity, which is the date when Air Lease Corp has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
Issue DateMaturityCouponRef Coupon  Rating
AIR LEASE CORP09/16/201409/15/20244.252.25
Air Lease 0201202401/22/201402/01/20244.852.25
AIR LEASE CORP01/14/201502/01/20223.752.0

Air Lease Corp Historical Liabilities

While analyzing the current debt level is an essential aspect of forecasting the current year budgeting needs of Air Lease, understanding its historical liability is critical in projecting Air Lease's future earnings, especially during periods of low and high inflation and deflation. Many analysts look at the trend in assets and liabilities and evaluate how Air Lease uses its financing power over time.

Understaning Air Lease Use of Financial Leverage

Air Lease financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Air Lease's total debt position, including all of outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Air Lease assets, the company is considered highly leveraged. Understanding the composition and structure of overall Air Lease debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it.
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Last ReportedProjected for 2021
Total Debt16.5 B13.7 B
Issuance Repayment of Debt Securities2.9 B2.4 B
Long Term Debt to Equity 2.72  2.33 
Debt to Equity Ratio 3.15  3.22 
Air Lease Corporation, an aircraft leasing company, engages in the purchase and leasing of new commercial jet aircraft to airlines worldwide. Air Lease Corporation was incorporated in 2010 and is headquartered in Los Angeles, California. Air Lease operates under Rental Leasing Services classification in the United States and is traded on New York Stock Exchange. It employs 120 people.

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Pair Trading with Air Lease

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Air Lease position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Air Lease will appreciate offsetting losses from the drop in the long position's value.

Air Lease Pair Correlation

Equities Pair Trading Analysis

Correlation analysis and pair trading evaluation for Air Lease and AeroCentury Corp. Pair trading can be used as a hedging technique within a particular sector or industry or even over random equities to generate better risk-adjusted return
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Please continue to the analysis of Air Lease Fundamentals Over Time. Note that the Air Lease Corp information on this page should be used as a complementary analysis to other Air Lease's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try CEO Directory module to screen CEOs from public companies around the world.

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The market value of Air Lease Corp is measured differently than its book value, which is the value of Air Lease that is recorded on the company's balance sheet. Investors also form their own opinion of Air Lease's value that differs from its market value or its book value, called intrinsic value, which is Air Lease's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Air Lease's market value can be influenced by many factors that don't directly affect Air Lease Corp underlying business (such as pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Air Lease's value and its price as these two are different measures arrived at by different means. Investors typically determine Air Lease value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Air Lease's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.