Willis Lease Finance Corp Announces Upsized Convertible Senior Notes Offering

On May 14, 2026, Willis Lease Finance Corporation (NASDAQ: WLFC), a prominent player in the aviation leasing sector, released a press statement detailing a significant financial maneuver. The company has priced an upsized public offering of convertible senior notes, which aims to bolster its capital structure and facilitate strategic hedging transactions. This move comes as part of the company's ongoing efforts to optimize its financial positioning in a dynamic market landscape.

Willis Lease Finance Corporation announced the pricing of its public offering of $200 million in aggregate principal amount of 2.50% convertible senior notes set to mature in 2031. The offering was notably increased from an initially projected size of $175 million, attesting to strong investor demand. Following underwriting discounts and estimated offering expenses, the company expects to net approximately $193.1 million from this issuance.

The offering is scheduled to close on May 18, 2026, pending the satisfaction of customary closing conditions. Notably, the underwriters have been granted a 30-day option to purchase an additional $30 million in principal amount of the notes to cover any over-allotments.

The net proceeds from this offering are intended for the temporary repayment of amounts outstanding under the company’s revolving credit facility. The funds will subsequently be allocated for general corporate purposes, reinforcing the company's liquidity and operational flexibility.

The convertible senior notes represent senior, unsecured obligations of Willis Lease, accruing interest at a rate of 2.50%, payable semi-annually on May 15 and November 15, commencing November 15, 2026. Holders of the notes will have the right to convert their holdings into shares of the company's common stock under specified circumstances and during designated periods. The initial conversion rate is set at 3.7202 shares per $1,000 principal amount of notes, establishing an initial conversion price of approximately $268.80 per share, which reflects a premium of around 40% over the company's current common stock price.

The company retains the option to redeem the notes, either in whole or in part, beginning May 21, 2029. Redemption can occur if the last reported sale price of the company’s common stock exceeds 130% of the conversion price for a defined period. If a "fundamental change" occurs, such as a change of control or delisting of the company's stock, noteholders may require the company to repurchase their notes at a cash price equal to the principal amount plus accrued interest.

In conjunction with the Notes Offering, Morgan Stanley & Co. LLC is facilitating a Concurrent Delta Offering, wherein 281,250 shares of the company’s common stock will be offered to the public at a price of $192.00 per share. This offering aims to facilitate hedging transactions for investors subscribing to the convertible notes. Importantly, the shares will be borrowed from non-affiliate third parties, and no new shares will be issued, meaning the company will not receive proceeds from this short sale.

Both offerings are contingent upon one another and are expected to close simultaneously.

The underwriting team for the Notes Offering includes Morgan Stanley & Co. LLC, BofA Securities, and Deutsche Bank Securities Inc., all serving as joint book-running managers. Their involvement underscores the offering's strategic significance and the confidence in Willis Lease’s financial trajectory.

Willis Lease Finance Corporation's decision to upsized its convertible senior notes offering reflects a proactive approach to capital management in response to favorable market conditions. By enhancing its financial flexibility and preparing for future opportunities, the company is positioning itself to navigate the complex and evolving landscape of the aviation industry. As the offerings progress toward their closing date, stakeholders will be keenly observing the market's response and the implications for Willis Lease’s growth strategy moving forward.