Obligation Air Lease Corp 3.25% ( US00912XBA19 ) en USD

Société émettrice Air Lease Corp
Prix sur le marché refresh price now   96.654 %  ▲ 
Pays  Etats-unis
Code ISIN  US00912XBA19 ( en USD )
Coupon 3.25% par an ( paiement semestriel )
Echéance 28/02/2025



Prospectus brochure de l'obligation Air Lease Corp US00912XBA19 en USD 3.25%, échéance 28/02/2025


Montant Minimal 2 000 USD
Montant de l'émission 700 000 000 USD
Cusip 00912XBA1
Notation Standard & Poor's ( S&P ) BBB ( Qualité moyenne inférieure )
Notation Moody's N/A
Prochain Coupon 01/09/2024 ( Dans 106 jours )
Description détaillée L'Obligation émise par Air Lease Corp ( Etats-unis ) , en USD, avec le code ISIN US00912XBA19, paye un coupon de 3.25% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 28/02/2025
L'Obligation émise par Air Lease Corp ( Etats-unis ) , en USD, avec le code ISIN US00912XBA19, a été notée BBB ( Qualité moyenne inférieure ) par l'agence de notation Standard & Poor's ( S&P ).







424B2
424B2 1 d506992d424b2.htm 424B2
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-207308
CALCULATION OF REGISTRATION FEE


Proposed
Proposed
Maximum
Maximum
Title of Each Class of
Amount to be
Offering Price
Aggregate
Amount of
Securities to be Registered

Registered

per Unit

Offering Price

Registration Fee(1)
2.500% Senior Notes due 2021

$550,000,000

99.381%

$546,595,000

$68,051.08
3.250% Senior Notes due 2025

$700,000,000

98.717%

$691,019,000

$86,031.87
Total

$1,250,000,000


$1,237,614,000

$154,082.94


(1)
The filing fee is calculated in accordance with Rule 457(r) and Rule 457(o) of the Securities Act of 1933, as amended, by multiplying the proposed
maximum aggregate offering price of the securities offered by the fee payment rate in effect on the date of fee payment.

PROSPECTUS SUPPLEMENT
(To prospectus dated October 6, 2015)
$1,250,000,000


Air Lease Corporation
$550,000,000 2.500% Senior Notes due 2021
$700,000,000 3.250% Senior Notes due 2025


We are offering $550,000,000 aggregate principal amount of 2.500% Senior Notes due 2021, or the 2021 notes, and $700,000,000 aggregate principal amount of 3.250%
Senior Notes due 2025, or the 2025 notes. We refer to the 2021 notes and the 2025 notes each as a "series" of notes and, collectively, as the "notes." We will pay interest on the
2021 notes semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2018. We will pay interest on the 2025 notes semi-annually in arrears
on March 1 and September 1 of each year, beginning on September 1, 2018. The 2021 notes will mature on March 1, 2021. The 2025 notes will mature on March 1, 2025. We may
redeem the notes at our option, in whole or in part, at any time and from time to time, at the applicable redemption prices described in this prospectus supplement under
"Description of Notes--Optional Redemption ." If a Change of Control Repurchase Event, as defined herein, occurs, unless we have exercised our option to redeem all of the notes
of a series, holders of the notes of such series may require us to repurchase the applicable notes at the prices described in this prospectus supplement under "Description of Notes--
Repurchase Upon Change of Control Repurchase Event."
The notes will be general unsecured senior obligations and rank equally in right of payment with our existing and future unsecured senior indebtedness. The notes will be
issued only in registered form in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
Each series of notes is a new issue of securities with no established trading market. We do not intend to apply to list either series of notes on any securities exchange or
include either series of notes in any automated quotation system.


Investing in the notes involves risks. See "Risk Factors" beginning on page S-7 of this prospectus supplement and those incorporated by
reference herein to read about certain factors you should consider before buying the notes.

Per 2021
Per 2025


Note
Total

Note
Total

Public offering price (1)

99.381%
$546,595,000
98.717%
$691,019,000
Underwriting discount


0.450%
$
2,475,000

0.625%
$
4,375,000
Proceeds, before expenses, to us (1)

98.931%
$544,120,500
98.092%
$686,644,000

(1)
Plus accrued interest from January 16, 2018 if settlement occurs after that date.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The notes will be ready for delivery in book-entry form only through the facilities of The Depository Trust Company for the accounts of its participants, including
Clearstream Banking, S.A., and Euroclear Bank S.A./N.V., as operator of the Euroclear System, against payment in New York, New York on or about January 16, 2018 which is
the fifth business day following the date of this prospectus supplement.


Joint Book-Running Managers

BofA Merrill Lynch

J.P. Morgan

SOCIETE GENERALE
Wells Fargo Securities
BMO Capital Markets

BNP PARIBAS
Citigroup
Commonwealth Bank of Australia
Fifth Third Securities
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Goldman Sachs & Co. LLC

ICBC Standard Bank

KeyBanc Capital Markets

Lloyds Securities
Loop Capital Markets
Mizuho Securities
Morgan Stanley

MUFG
RBC Capital Markets

Stifel

SunTrust Robinson Humphrey
Prospectus Supplement dated January 8, 2018
This prospectus supplement, the accompanying prospectus and any free writing prospectus that we prepare or authorize, contain and
incorporate by reference information that you should consider when making your investment decision. We have not, and the underwriters and
their affiliates and agents have not, authorized anyone to provide you with any information or represent anything about us other than what is
contained or incorporated by reference in this prospectus supplement or the accompanying prospectus or in any free writing prospectus prepared
by or on behalf of us or to which we have referred you. We are not, and the underwriters and their affiliates and agents are not, making any offer
to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained or
incorporated by reference in this prospectus supplement, the accompanying prospectus or in any free writing prospectus prepared by us or on our
behalf is accurate as of any date other than their respective dates. Our business, financial condition, results of operations and prospects may have
changed since those dates.

S-i
TABLE OF CONTENTS
Prospectus Supplement



Page
About this Prospectus Supplement
S-iii
Forward-Looking Statements
S-iii
Summary
S-1
Risk Factors
S-7
Use of Proceeds
S-13
Capitalization
S-14
Ratio of Earnings to Fixed Charges
S-15
Description of Notes
S-16
Book-Entry, Delivery and Form
S-30
Material United States Federal Income Tax Considerations
S-33
Certain Considerations Applicable to ERISA, Governmental and Other Plan Investors
S-38
Underwriting
S-41
Legal Matters
S-47
Experts
S-47
Where You Can Find More Information
S-48
Incorporation by Reference
S-49
Prospectus

About This Prospectus

1
Where You Can Find More Information

2
Incorporation by Reference

2
Forward-Looking Statements

3
Air Lease Corporation

5
Risk Factors

5
Ratios of Earnings to Fixed Charges

6
Use of Proceeds

7
Description of Debt Securities

8
Description of Capital Stock

15
Description of Warrants

20
Description of Depositary Shares

21
Description of Rights

24
Description of Purchase Contracts

25
Description of Units

27
Certain Relationships and Related Party Transaction with Selling Stockholders

28
Selling Stockholders

29
Plan of Distribution

33
Legal Matters

37
Experts

37
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S-ii
ABOUT THIS PROSPECTUS SUPPLEMENT
This document consists of two parts. The first part is this prospectus supplement, which describes the specific terms of this offering, the notes and
matters relating to us and our financial performance and condition. The second part is the accompanying prospectus, which provides a more general
description of the terms and conditions of the various securities we may, from time to time, offer under our registration statement on Form S-3 that we
filed with the Securities and Exchange Commission (the "SEC") utilizing a "shelf" registration process, some of which may not apply to this offering. If
information in this prospectus supplement is inconsistent with the accompanying prospectus, you should rely on this prospectus supplement.
It is important for you to read and consider all of the information contained in this prospectus supplement and the accompanying prospectus in
making your investment decision. You also should read and consider the information in the documents incorporated by reference in this prospectus
supplement and the accompanying prospectus and the additional information described under "Where You Can Find More Information" on page S-48 of
this prospectus supplement and page 2 of the accompanying prospectus.
When this prospectus supplement uses the terms "Company," "ALC," "we," "our" and "us," they refer to Air Lease Corporation and its consolidated
subsidiaries unless otherwise stated or the context otherwise requires.
FORWARD-LOOKING STATEMENTS
Statements in this prospectus supplement and the accompanying prospectus, including the documents that are incorporated by reference, that are not
historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements are based on our current intent,
belief and expectations. We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act
of 1995 for all forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as "anticipate,"
"believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "intends,"
"seeks" and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions
and uncertainties that could cause actual results to differ materially from those expressed in such statements. Our actual results could differ materially from
those anticipated in such forward-looking statements as a result of the factors discussed in the section titled "Risk Factors" beginning on page S-7 of this
prospectus supplement and in our most recent Annual Report on Form 10-K, as revised or supplemented by any subsequent Quarterly Report on Form
10-Q filed with the SEC, and elsewhere in this prospectus supplement, the accompanying prospectus and the documents that are incorporated by reference
in this prospectus supplement and the accompanying prospectus, including the following factors, among others:


·
our inability to make acquisitions of, or lease, aircraft on favorable terms;


·
our inability to sell aircraft on favorable terms;

·
our inability to obtain additional financing on favorable terms, if required, to complete the acquisition of sufficient aircraft as currently

contemplated or to fund the operations and growth of our business;


·
our inability to effectively oversee our managed fleet;


·
our inability to obtain refinancing prior to the time our debt matures;


·
impaired financial condition and liquidity of our lessees;


·
deterioration of economic conditions in the commercial aviation industry generally;


·
increased maintenance, operating or other expenses or changes in the timing thereof;


·
changes in the regulatory environment;

S-iii

·
our inability to effectively deploy the net proceeds from our capital raising activities, including from the issue of the notes;

·
unanticipated impacts of the Tax Cuts and Job Act of 2017 (the "Act"), including as a result of changes in assumptions we make in our

interpretation of the Act, guidance related to application of the Act that may be issued in the future, and actions that we may take as a result of
our expected impact of the Act; and


·
potential natural disasters and terrorist attacks and the amount of our insurance coverage, if any, relating thereto.
All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ
materially from our expectations. You are therefore cautioned not to place undue reliance on such statements. Any forward-looking statements are
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qualified in their entirety by reference to the risk factors discussed throughout this prospectus supplement, the accompanying prospectus and the documents
incorporated by reference in this prospectus supplement and the accompanying prospectus. Further, any forward-looking statement speaks only as of the
date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on
which the statement is made or to reflect the occurrence of unanticipated events.

S-iv
SUMMARY
This summary highlights information contained elsewhere or incorporated by reference in this prospectus supplement and the accompanying
prospectus. This summary sets forth the material terms of this offering but does not contain all of the information that you should consider before
deciding to invest in the notes. You should read the entire prospectus supplement and the accompanying prospectus, as well as the documents
incorporated by reference in this prospectus supplement and the accompanying prospectus, carefully before making an investment decision, including
the section titled "Risk Factors" beginning on page S-7 of this prospectus supplement and in our Annual Report on Form 10-K for the year ended
December 31, 2016 incorporated herein by reference.
Air Lease Corporation
Air Lease Corporation is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. We
are principally engaged in purchasing new commercial jet transport aircraft directly from aircraft manufacturers, such as The Boeing Company
("Boeing") and Airbus S.A.S. ("Airbus"), and leasing those aircraft to airlines throughout the world. In addition to our leasing activities, we sell
aircraft from our operating lease portfolio to third parties, including other leasing companies, financial services companies and airlines. We also
provide fleet management services to investors and owners of aircraft portfolios for a management fee. Our operating performance is driven by the
growth of our fleet, the terms of our leases, the interest rates on our debt, and the aggregate amount of our indebtedness, supplemented by the gains
from our aircraft sales and trading activities and our management fees.
We currently have relationships with over 200 airlines across 70 countries. We operate our business on a global basis, providing aircraft to
airline customers in every major geographical region, including markets such as Asia, the Pacific Rim, Latin America, the Middle East, Europe,
Africa and North America. Many of these markets are experiencing increased demand for passenger airline travel and have lower market saturation
than more mature markets such as the United States and Western Europe. We expect that these markets will also present significant replacement
opportunities in upcoming years as many airlines look to replace aging aircraft with new, modern technology, fuel efficient jet aircraft. An important
focus of our strategy is meeting the needs of this replacement market. Airlines in some of these markets have fewer financing alternatives, enabling us
to command relatively higher lease rates compared to those in more mature markets.
We mitigate the risks of owning and leasing aircraft through careful management and diversification of our leases and lessees by geography,
lease term, and aircraft age and type. We believe that diversification of our operating lease portfolio reduces the risks associated with individual lessee
defaults and adverse geopolitical and regional economic events. We mitigate the risks associated with cyclical variations in the airline industry by
managing customer concentrations and lease maturities in our operating lease portfolio to minimize periods of concentrated lease expirations. In order
to maximize residual values and minimize the risk of obsolescence, our strategy is to own an aircraft during the first third of its expected 25 year
useful life.
As of September 30, 2017, we owned 236 aircraft with a net book value of $12.7 billion. The weighted average lease term remaining of our
operating lease portfolio was 6.8 years and the weighted average age of our fleet was 3.7 years as of September 30, 2017. Our fleet grew by 5.2%
based on net book value of $12.7 billion as of September 30, 2017 compared to $12.0 billion as of December 31, 2016. In addition, our managed fleet
increased to 51 aircraft as of September 30, 2017, from 30 aircraft as of December 31, 2016. As of September 30, 2017, we had a globally diversified
customer base comprised of 90 airlines in 55 countries. As of September 30, 2017, all of the aircraft in our operating lease portfolio were subject to
lease, except for one aircraft, which is in transition to the follow-on lessee and is currently subject to a signed lease agreement.


S-1
As of September 30, 2017, we had, in the aggregate, 372 aircraft on order with Boeing and Airbus for delivery through 2023, with an estimated
aggregate commitment of $28.1 billion, making us one of the world's largest customers for new commercial jet aircraft.
We ended the third quarter of 2017 with $23.3 billion in committed minimum future rental payments. This includes $9.6 billion in contracted
minimum rental payments on the aircraft in our existing fleet and $13.7 billion in minimum future rental payments related to aircraft that were
delivered during the last quarter of 2017 and will deliver through 2021.
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We finance the purchase of aircraft and our business with available cash balances, internally generated funds, including aircraft sales and
trading activities, and debt financings. We have structured ourselves to have an investment-grade credit profile and our debt financing strategy has
focused on funding our business on an unsecured basis, with a limited utilization of export credit or secured financing. We ended the third quarter of
2017 with total debt outstanding, net of discounts and issuance costs, of $9.2 billion, of which 78.1% was at a fixed rate and 94.0% of which was
unsecured, with a composite cost of funds of 3.11%. On November 20, 2017, we issued (i) $600 million aggregate principal amount of 2.750% Senior
Notes due 2023 and (ii) $500 million aggregate principal amount of 3.625% Senior Notes due 2027 (collectively, the "November 2017 Bonds"). The
proceeds from the issuance of the November 2017 Bonds were primarily used to purchase additional aircraft as well as for other general corporate
purposes, which included, among other things, the repayment of existing indebtedness. As of January 5, 2018, our total consolidated debt outstanding,
net of discounts and issuance costs, was approximately $9.5 billion.
On December 22, 2017, the Tax Cuts and Jobs Act (the "Act") was signed into law. We expect the overall net impact of the Act to be favorable
to us with significant upfront and ongoing benefits to us due to the reduction in the federal corporate tax rate, as of January 1, 2018, from 35% to
21%. As a result of the reduction in the federal corporate tax rate, we estimate a 40% reduction in our deferred tax liability and plan to record such
reduction in our fourth quarter 2017 tax provision.
Air Lease Corporation is incorporated in Delaware. Our principal executive office is located at 2000 Avenue of the Stars, Suite 1000N, Los
Angeles, California 90067. Our telephone number is (310) 553-0555 and our website is www.airleasecorp.com. Information included or referred to
on, or otherwise accessible through, our website is not intended to form a part of or be incorporated by reference into this prospectus supplement or
the accompanying prospectus.


S-2
THE OFFERING
The summary below describes the principal terms of the notes. Certain of the terms and conditions described below are subject to important
limitations and exceptions. The "Description of Notes" section of this prospectus supplement contains a more detailed description of the terms and
conditions of the notes. As used in this section "Summary--The Offering," "the Company," "we," "our," and "us" refer to Air Lease Corporation
only and not to its subsidiaries.

Issuer
Air Lease Corporation, a Delaware corporation.

Securities
$550,000,000 aggregate principal amount of 2.500% Senior Notes due 2021 (the "2021
notes").

$700,000,000 aggregate principal amount of 3.250% Senior Notes due 2025 (the "2025

notes" and, collectively with the 2021 notes, the "notes").

Maturity
The 2021 notes will mature on March 1, 2021.


The 2025 notes will mature on March 1, 2025.

Offering Price
99.381% of the principal amount plus accrued interest, if any, from, January 16, 2018, for the
2021 notes.

98.717% of the principal amount plus accrued interest, if any, from, January 16, 2018, for the

2025 notes.

Interest Rate
2.500% per annum for the 2021 notes.


3.250% per annum for the 2025 notes.

Interest Payment Dates
March 1 and September 1, commencing September 1, 2018 (long first coupon), for the 2021
notes.

March 1 and September 1, commencing September 1, 2018 (long first coupon), for the 2025

notes.

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Record Payment Dates
Every February 15 and August 15 preceding each interest payment date for the 2021 notes.


Every February 15 and August 15 preceding each interest payment date for the 2025 notes.

Optional Redemption
On any date prior to March 1, 2021, we may redeem the 2021 notes at our option, in whole
or in part, at a redemption price equal to 100% of the aggregate principal amount of the 2021
notes plus an Applicable Premium, plus accrued and unpaid interest, if any, to the
redemption date.


S-3
On any date prior to January 1, 2025, we may redeem the 2025 notes at our option, in whole
or in part, at a redemption price equal to 100% of the aggregate principal amount of the 2025
notes plus an Applicable Premium, plus accrued and unpaid interest, if any, to the

redemption date. On or after January 1, 2025, we may redeem the 2025 notes at our option,
in whole or in part, at a redemption price equal to 100% of the aggregate principal amount of
the 2025 notes plus accrued and unpaid interest, if any, to the redemption date.


See "Description of Notes--Optional Redemption ."

Change of Control
If a Change of Control Repurchase Event occurs, unless we have exercised our option to
redeem all of the notes of a series (as described in this prospectus supplement under
"Description of Notes--Optional Redemption "), holders of the notes of such series may
require us to repurchase the applicable notes at the prices described in this prospectus
supplement under "Description of Notes--Repurchase Upon Change of Control Repurchase
Event."

Ranking
The notes will be our senior unsecured obligations and will:


· rank senior in right of payment to all of our future subordinated indebtedness;


· rank equally in right of payment with all of our existing and future senior indebtedness;

· be effectively subordinated to any of our existing and future secured debt, to the extent of

the value of the assets securing such debt; and

· be structurally subordinated to all of the existing and future indebtedness and other

liabilities (including trade payables) of each of our subsidiaries.

As of September 30, 2017, we and our subsidiaries had approximately $9.2 billion of total
consolidated indebtedness, net of discounts and issuance costs, and we (excluding our

subsidiaries) had $8.8 billion of unsecured indebtedness, net of discounts and issuance costs.
As of January 5, 2018, our total consolidated indebtedness, net of discounts and issuance
costs, was approximately $9.5 billion.

As of January 5, 2018, assuming the notes had been issued (but without giving effect to the

application of the net proceeds we receive from the offering in the manner described under
"Use of Proceeds"):

· we and our subsidiaries would have had approximately $10.7 billion of total consolidated

indebtedness (including the notes), net of discounts and issuance costs;

· we (excluding our subsidiaries) would have had approximately $10.2 billion of unsecured

indebtedness (including the notes), net of discounts and issuance costs;


S-4
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· our subsidiaries would have had approximately $516.0 million of total indebtedness, all of

which would have been structurally senior to the notes; and

· we (excluding our subsidiaries) would have had guaranties of subsidiary indebtedness of
approximately $320.1 million that were secured by pledges of our equity in such

subsidiaries, and no other secured indebtedness, and a limited unsecured (10%) guarantee
of approximately $195.9 million of subsidiary indebtedness.

Covenants
The supplemental indentures governing the notes will include certain restrictions on liens and
mergers, consolidations and transfers of substantially all of our assets. These covenants are
subject to important qualifications and exceptions. See "Description of Notes--Certain
Covenants" in this prospectus supplement.

Absence of Public Market for the Notes
Each series of notes is a new issue of securities with no established trading market. We do
not intend to apply to list either series of notes on any securities exchange or include either
series of notes in any automated quotation system. Accordingly, a liquid market for the notes
may not develop. The underwriters have advised us that they currently intend to make a
market in each series of notes. However, they are not obligated to do so, and any market
making with respect to the notes may be discontinued without notice.

Use of Proceeds
We estimate that the net proceeds from this offering will be approximately $1.230 billion,
after deducting the underwriting discount and estimated offering expenses payable by us. We
intend to use the net proceeds from this offering for general corporate purposes, which may
include, among other things, the purchase of commercial aircraft and the repayment of
existing indebtedness. Affiliates of the underwriters may receive a portion of the net proceeds
to the extent we use net proceeds to repay indebtedness under which certain of the
underwriters or their affiliates are lenders. See "Use of Proceeds."

Form and Denomination
The notes will be issued in fully registered form in minimum denominations of $2,000 and
integral multiples of $1,000 in excess thereof.

Book-Entry Form
The notes will be issued in book-entry form and will be represented by permanent global
certificates deposited with, or on behalf of, The Depository Trust Company ("DTC") and
registered in the name of Cede & Co., DTC's nominee. Beneficial interests in the notes will
be shown on, and transfers will be effected only through, records maintained by DTC or its
nominee, and these interests may not be exchanged for certificated notes, except in limited
circumstances. See "Book-Entry, Delivery and Form."

Trustee
Deutsche Bank Trust Company Americas.

Governing Law
New York.


S-5
Risk Factors
In evaluating an investment in the notes, you should carefully consider, along with the other
information in this prospectus supplement, the accompanying prospectus and the documents
incorporated by reference in this prospectus supplement and the accompanying prospectus,
the specific factors set forth under "Risk Factors" beginning on page S-7 of this prospectus
supplement and in our Annual Report on Form 10-K for the year ended December 31, 2016,
incorporated herein by reference, for risks involved with an investment in the notes.


S-6
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RISK FACTORS
An investment in the notes involves certain risks. You should carefully consider the risks described below and in the accompanying prospectus, as
well as the risk factors and other information included or incorporated by reference in this prospectus supplement and the accompanying prospectus
before making an investment decision. Our business, financial condition or results of operations could be materially adversely affected by any of these
risks. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also materially and adversely affect our
business, financial condition or results of operations. The trading price of the notes could decline due to any of these risks, and you may lose all or a
substantial part of your investment. This prospectus supplement also contains forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us
described or incorporated by reference in this prospectus supplement and the accompanying prospectus.
Unless the context otherwise requires, as used in this "Risk Factors" section, "we," "our," and "us" refer to Air Lease Corporation only and not to
its subsidiaries. For purposes of this section, the term "indenture" as it relates to a particular series of notes refers to the indenture, dated October 11,
2012, between us and Deutsche Bank Trust Company Americas, as trustee, together with the respective supplemental indenture that will establish and
govern the terms of such series of notes offered hereby.
Risks Relating to Our Indebtedness and the Notes
Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under the notes.
We and our subsidiaries have, and after the offering of the notes will continue to have, a significant amount of indebtedness. As of September 30,
2017, our total consolidated indebtedness, net of discounts and issuance costs, was approximately $9.2 billion. As of January 5, 2018, our total
consolidated indebtedness, net of discounts and issuance costs, was approximately $9.5 billion and we expect this amount to grow as we acquire more
aircraft.
Subject to the limits contained in the agreements governing our existing and future indebtedness and the indenture, we may be able to incur
substantial additional debt from time to time to finance aircraft, working capital, capital expenditures, investments or acquisitions, and for other purposes.
If we do so, the risks related to our high level of debt could intensify. Specifically, our level of debt could have important consequences to the holders of
the notes, including the following:


·
making it more difficult for us to satisfy our payment obligations with respect to the notes and our other debt;


·
limiting our ability to obtain additional financing to fund the acquisition of aircraft or for other corporate requirements;

·
requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the

amount of cash flows available for dividends, aircraft acquisitions and other general corporate purposes;


·
increasing our vulnerability to general negative economic and industry conditions;

·
exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our various credit facilities, are at

variable rates of interest;


·
limiting our flexibility in planning for and reacting to changes in the aircraft industry;


·
placing us at a disadvantage compared to other competitors; and


·
increasing our cost of borrowing.

S-7
In addition, certain agreements governing our existing indebtedness contain financial maintenance covenants that require us to satisfy certain ratios
and maintain minimum net worth, and other restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest. Our
failure to comply with those covenants could result in an event of default which, if not cured or waived, may result in the acceleration of some or all of our
debt, including the notes.
We may not be able to generate sufficient cash to service all of our indebtedness, including the notes, and may be forced to take other actions to satisfy
our obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments on or refinance our debt obligations, including the notes, depends on our financial condition and operating
performance, which are subject to prevailing economic and competitive conditions and to financial, business, legislative, regulatory and other factors
beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal of, premium,
if any, or interest on our indebtedness, including the notes.
As of January 5, 2018, after giving effect to this offering, we would have had approximately $10.7 billion in consolidated debt outstanding, net of
discounts and issuance costs, and we expect this amount to grow as we acquire more aircraft. Unless extended or refinanced, a substantial amount of our
outstanding indebtedness may mature or fully amortize before the maturity of the notes offered hereby. If our cash flows and capital resources are
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insufficient to fund our debt service obligations, and if we are unable to refinance our maturity debt on acceptable terms, we could face substantial liquidity
problems and could be forced to reduce or delay aircraft purchases or to dispose of material assets or leases, or seek additional debt or equity capital or to
restructure our indebtedness, including the notes. We may not be able to timely effect any such alternative measures on commercially reasonable terms or
at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. Certain agreements governing our
existing indebtedness restrict our ability to dispose of assets and use the proceeds from those dispositions. We may not be able to consummate those
dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due. See "Part II. Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources--Debt" and "--Contractual Obligations" and Note 2 to
our Consolidated Financial Statements, each in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, and "Part I. Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources--Debt" and "--Contractual
Obligations" and Note 4 to our Consolidated Financial Statements, each in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017,
which are incorporated herein by reference.
In addition, we conduct substantially all of our operations through our subsidiaries. None of our subsidiaries will guarantee or otherwise be obligated
to pay any of our obligations under the notes. For the nine months ended September 30, 2017, our subsidiaries generated substantially all of our
consolidated revenue and operating cash flow. As of September 30, 2017, our subsidiaries held 100% of our aircraft assets and had approximately
$557.9 million of total indebtedness, all of which is structurally senior to the notes, and we have provided a limited (10%) unsecured guarantee of
approximately $215.2 million of certain of our subsidiary secured term loans. Our subsidiaries do not have any obligation to pay amounts due on the notes
or to make funds available for that purpose; however, our subsidiaries have covenanted to become guarantors of certain of our other outstanding
indebtedness in certain circumstances and may in the future guarantee other indebtedness of ours. Repayment of our indebtedness, including the notes, is
dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividends, distributions or otherwise.
Our subsidiaries may not be able to, or may not be permitted to, make distributions to us sufficient to enable us to make payments in respect of our
indebtedness, and to the extent our subsidiaries have provided guarantees of our other indebtedness, the notes will be structurally subordinated to such
guaranteed indebtedness. Each subsidiary is a distinct legal entity, and legal and contractual restrictions may limit our ability to obtain cash from our
subsidiaries. In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on
our indebtedness, including the notes. For additional risks related to our subsidiaries' ability to

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make payments and distributions to us, see the risk factor titled "Certain of our subsidiaries may be restricted in their ability to make distributions to us
which would negatively affect our financial condition and cash flow" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016,
which is incorporated herein by reference. Also, as of September 30, 2017, we had pledged our interests in our subsidiaries to secure our guarantees of
approximately $342.8 million of subsidiary indebtedness. Any foreclosure on these interests by our lenders could reduce our cash available to pay our
obligations under the notes.
Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or
at all, would materially and adversely affect our financial position and results of operations and our ability to satisfy our obligations under the notes.
If we cannot make scheduled payments on our indebtedness, we will be in default and holders of our debt securities or our lenders, as applicable,
may be able to declare such indebtedness to be due and payable, terminate commitments to lend money, foreclose against the assets, if any, securing such
indebtedness or pursue other remedies, including potentially forcing us into bankruptcy or liquidation. All of these events could result in you losing your
entire investment in the notes.
The limited covenants applicable to the notes may not provide protection against some events or developments that may affect our ability to repay the
notes or the trading prices for the notes.
The indenture governing the notes, among other things, does not:

·
require us to maintain any financial ratios or specific levels of net worth, revenues, income, cash flow or liquidity and, accordingly, does not

protect holders of the notes in the event that we experience significant adverse changes in our financial condition or results of operations;

·
limit our ability to incur indebtedness, including secured indebtedness (subject to compliance with the lien covenant), that is senior to or equal

in right of payment to the notes;

·
limit our subsidiaries' ability to incur secured (subject to compliance with the lien covenant) or unsecured indebtedness, which would be

structurally senior to the notes;


·
restrict our ability to repurchase or prepay our securities; or

·
restrict our ability to make investments or to repurchase or pay dividends or make other payments in respect of our common stock or other

securities ranking junior to the notes.
For these reasons, you should not consider the lien or merger and consolidation covenants in the indenture as significant factors in evaluating
whether to invest in the notes.
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Negative changes in our credit ratings may limit our ability to secure financing, increase our borrowing costs and adversely affect the market value and
liquidity of the notes.
We are currently subject to periodic review by independent credit rating agencies Standard & Poor's Rating Services ("S&P"), Fitch Ratings, Inc.
("Fitch") and Kroll Bond Ratings ("Kroll"), each of which currently maintains investment grade credit ratings with respect to our company and certain of
our debt securities, and we may become subject to periodic review by other independent credit rating agencies in the future. An increase in the level of our
outstanding indebtedness, or other events that could have an adverse impact on our business, properties, financial condition, results of operations or
prospects, may cause S&P, Fitch or Kroll, or, in the future, other rating agencies, to downgrade or withdraw our debt credit rating generally, and/or the
ratings on the notes, which could adversely impact the trading prices for, and/or the liquidity of, the notes.
The credit ratings assigned to the notes are limited in scope, and do not address all material risks relating to an investment in the notes, but rather
reflect only the view of the applicable rating agency at the time the rating is

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issued. We cannot assure you that these credit ratings will remain in effect for any given period of time or that a rating will not be lowered, suspended or
withdrawn entirely by the applicable rating agency, if, in such rating agency's sole judgment, circumstances so warrant. Ratings are not a recommendation
to buy, sell or hold any security. Each agency's rating should be evaluated independently of any other agency's rating. Actual or anticipated changes or
downgrades in our credit ratings, including any announcement that our ratings are under further review for a downgrade, could affect the trading prices for,
or liquidity of, the notes, increase our corporate borrowing costs and limit our access to the capital markets and result in more restrictive covenants in
future debt agreements.
The credit ratings assigned to each series of notes may not reflect all risks of an investment in the applicable notes.
The credit ratings assigned to each series of notes will reflect the rating agencies' assessments of our ability to make payments on the applicable
notes when due. Consequently, real or anticipated changes in these credit ratings will generally affect the market value of the notes. These credit ratings,
however, may not reflect the potential impact of risks related to structure, market or other factors related to the value of the notes.
The notes will be effectively subordinated to our secured indebtedness to the extent of the value of the property securing that indebtedness.
The notes will not be secured by any of our or our subsidiaries' assets. As a result, the notes will be effectively subordinated to our and such
subsidiary's indebtedness with respect to the assets that secure such indebtedness. As of September 30, 2017, we had guarantees of subsidiary indebtedness
of approximately $342.8 million secured by pledges of the equity of our subsidiaries, and our subsidiaries had approximately $557.9 million of secured
indebtedness outstanding. In addition, we and our subsidiaries may incur additional secured debt in the future. As a result of this effective subordination,
upon a default in payment on, or the acceleration of, any of this secured indebtedness, or in the event of bankruptcy, insolvency, liquidation, dissolution or
reorganization of our company or any subsidiary or subsidiaries, the proceeds from the sale of assets securing our or our subsidiaries' secured indebtedness
or guarantees will only be available to pay obligations on the notes and other senior unsecured obligations after such secured debt has been paid in full.
Consequently, the holders of the notes may receive less, ratably, than the holders of secured or guaranteed debt in the event of our or our subsidiaries'
bankruptcy, insolvency, liquidation, dissolution or reorganization.
The notes will be structurally subordinated to all obligations of our existing and future subsidiaries.
The notes will not be guaranteed by any of our subsidiaries and our subsidiaries will have no obligation, contingent or otherwise, to pay amounts due
under the notes or to make any funds available to pay those amounts, whether by dividend, distribution, loan or other payment. However, our subsidiaries
have covenanted to become guarantors of certain of our other indebtedness in certain circumstances and may in the future guarantee other indebtedness of
ours. Accordingly, the notes will be structurally subordinated to all indebtedness and other obligations of any subsidiary, including any guarantees issued
by such subsidiaries, such that in the event of bankruptcy, insolvency, liquidation, reorganization, dissolution or other winding up of any such subsidiary, all
of that subsidiary's creditors (including secured creditors and trade creditors) would be entitled to payment in full out of that subsidiary's assets before we
would be entitled to any payment. The indenture does not contain any limitations on the ability of our subsidiaries to incur or guarantee additional
indebtedness or the amount of other liabilities, such as trade payables, that may be incurred or guaranteed by these subsidiaries.
For the nine months ended September 30, 2017, our subsidiaries generated substantially all of our consolidated revenue and operating cash flow. As
of September 30, 2017, our subsidiaries held 100% of our aircraft assets and had approximately $557.9 million of total indebtedness, all of which is
structurally senior to the notes.

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We may not be able to repurchase the notes upon a Change of Control Repurchase Event, and not every change of control or other significant
transaction will constitute a Change of Control Repurchase Event.
Upon the occurrence of a Change of Control Repurchase Event, unless we have exercised our right to redeem all of the notes of a series, each holder
of the notes of such series will have the right to require us to repurchase all or any part of such holder's notes at a price equal to 101% of their principal
amount, plus accrued and unpaid interest, if any, to the date of repurchase. If we experience a Change of Control Repurchase Event, there can be no
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