Welcome to Turbine Engine Finance Reports

Turbine Engines Securitization Ltd. (“Turbine Bermuda”) is a special-purpose exempted limited liability company incorporated under the laws of Bermuda established on April 16, 2013 (registration number 47596), to purchase and own a portfolio of aircraft engines and related leases. Turbine Bermuda is resident in Ireland for tax purposes and is managed and controlled through its board of directors in Ireland. Turbine Bermuda and Turbine USA, LLC, a limited liability company organized under the laws of the State of Delaware and a wholly-owned subsidiary of Turbine Bermuda, established on November 1, 2013 (organization number 5425853) (“Turbine USA”), co-issued the Initial Notes. Turbine acquired an initial portfolio (the “Initial Portfolio”) of 32 aircraft engines (together with any Additional Engines, the “Engines”) from certain affiliates of General Electric Capital Corporation, a Delaware corporation (“GECC”). On the Closing Date, Turbine Bermuda agreed to purchase from such affiliates of GECC (collectively, the “Sellers”) 100% of the beneficial interests in 18 Utah common law trusts (the “Bermuda Engine Trusts”), Turbine USA, which elected to be treated as a corporation for U.S. federal income tax purposes, agreed to purchase 100% of the beneficial interests in 12 Utah common law trusts (the “USA Engine Trusts” and, together with the Bermuda Engine Trusts, the “Engine Trusts”), and Turbine Engines Ireland II Limited, a limited liability company organized under the laws of Ireland and a wholly owned subsidiary of Turbine Bermuda (“Turbine Ireland”), agreed to purchase two Engines on lease to two Lessees (the “Ireland Engines” and, together with the Engine Trusts, the “Engine Assets”) from the Sellers. The purchases were consummated commencing on the closing date of the offering (such date, the “Closing Date”) and continued until the date 210 days after the Closing Date (the “Delivery Period” and such 210th day, the “Delivery Expiry Date”). Turbine directly or indirectly funded the payment of the purchase price for the Engine Assets from the proceeds of the Initial Notes, as well as with the proceeds from the issuance by Turbine Bermuda of the E Certificate. The purchase of the Engine Assets was made pursuant to an asset purchase agreement between Turbine Bermuda, Turbine USA, Turbine Ireland, GECC, GECAS and the Sellers (the “Asset Purchase Agreement”).

Initial Portfolio

All of the Engines in the Initial Portfolio and any other Engines acquired directly or indirectly by Turbine are Stage 3 aircraft jet engines. At Closing all of the Engines were subject to operating leases that, when originally entered into, were for terms of 12 months or greater and were on lease to 15 lessees (the “Lessees”) located in eight countries.

Issuer Subsidiaries

Turbine Bermuda initially owned 3? special purpose companies, including Turbine USA, Turbine Ireland and Turbine Engines Ireland I Ltd. (“Turbine LILO”), a Bermuda limited company. Turbine Ireland directly owns two Engines, which it in turn were leased lease to individual Lessees, and leased two other Engines from certain Issuer Subsidiaries and subleased those Engines to the applicable Lessee. Turbine LILO did not own any Engines but it leases Engines from certain Issuer Subsidiaries and subleases those Engines to the applicable Lessees. This structure is designed to accommodate the tax or regulatory needs of certain Lessees. These special purpose companies, including Turbine USA, Turbine Ireland, Turbine LILO, the Engine Trusts and any other special purpose companies, trusts or other entities formed by Turbine that own or lease Engines, are referred to as “Issuer Subsidiaries.” Turbine Bermuda and the Issuer Subsidiaries are referred to, collectively, as the “Issuer Group” and, individually, as an “Issuer Group Member”.’

Initial Notes

On the Closing Date, Turbine Bermuda and Turbine USA co-issued the Series 2013-1A Notes (together with any Additional Notes designated as Series A Notes that may be issued in the future, the “Series A Notes”) in the initial principal amount of $275,000,000 and the Series 2013-1B Notes (together with any Additional Notes designated as Series B Notes that may be issued in the future, the “Series B Notes”) in the initial principal amount of $30,000,000. The net proceeds from the sale of the Initial Notes, after deposit of the Initial Junior Cash Amount and maintenance and other reserve amounts and the payment of certain transaction expenses, together with the proceeds of the E Certificate, were deposited in a separate account (the “Engine Acquisition Account”) and used to fund the payment to the Sellers of the balance of the purchase price of the Engine Assets owed to the Sellers on or promptly following the respective Delivery Dates. The Series A Notes and the Series B Notes were issued pursuant to a Trust Indenture (the “Indenture”) among Turbine Bermuda, Turbine USA, the Administrative Agent, Crédit Agricole Corporate and Investment Bank (“Crédit Agricole CIB”), the Initial Senior Credit Facility Provider and Deutsche Bank Trust Company Americas (“DB Trust Company”), as trustee (the “Trustee”). Each series of Initial Notes have an expected amortization schedule and an expected final payment date as well as a legal final maturity date. Payments on the Series B Notes are subordinated to payments on the Series A Notes to the extent provided in the Indenture.

Collateral

To secure repayment of the Notes, Turbine Bermuda and Turbine USA each pledged its ownership interests in the Issuer Subsidiaries, including, in the case of Turbine Bermuda, the membership interests in Turbine USA, to DB Trust Company, as Security Trustee (the “Security Trustee”), pursuant to a Security Trust Agreement (the “Security Trust Agreement”) among the Security Trustee, Turbine Bermuda, Turbine USA and the Issuer Subsidiaries. Each Issuer Subsidiary formed or acquired in the future will become a party to the Security Trust Agreement. Under the Security Trust Agreement, the Engine Trusts and the other Issuer Subsidiaries also pledged all of their other assets to the Security Trustee, including a security interest in the Engine owned by each Issuer Subsidiary and in the leases of such Engine and related assets. To the extent applicable under the Cape Town Convention, each Issuer Subsidiary holding title to an Engine that is situated in a country that is a party to the Cape Town Convention, which includes each of the Engine Trusts and Turbine Ireland, will be required pursuant to the Security Trust Agreement to cause the security interest in the Engines to be registered with the International Registry (the “International Registry”) under the Cape Town Convention (the “Cape Town Convention”), a multilateral treaty that entered into force on March 1, 2006. In the case of a Lessee situated in a country that is a party to the Cape Town Convention, the Issuer Subsidiaries will be required pursuant to the Security Trust Agreement to (i) cause the international interests in the Leases with such Lessee (to the extent that they were entered into, novated or extended after the date the Cape Town Convention entered into force in such country) to be registered with the International Registry and (ii) cause the assignments of such international interests to the Security Trustee to be so registered. The contract of sale with respect to each Engine by which title is conveyed from a Seller to an Issuer Subsidiary will also be required pursuant to the Security Trust Agreement to be registered with the International Registry. In addition, the Issuer Subsidiaries will be required pursuant to the Security Trust Agreement to cause an appropriate instrument evidencing the security interest in (a) the Engines and (b) the leases with U.S. Lessees and certain non-U.S. Lessees to be filed with the central registry maintained by the Federal Aviation Administration (the “FAA”).

Ownership of Turbine Bermuda

Turbine Bermuda has a single class of common equity shares (the “Common Shares”), all of which are owned by a Bermuda trustee (the “Bermuda Trustee”) in its capacity as trustee of the Turbine Engines Securitization Purpose Trust (the “Purpose Trust”), for the purposes of the Purpose Trust and for such charitable purposes permitted under Bermuda law as the trustee may select. To secure repayment of the Notes, the Bermuda Trustee pledged its interest in the Common Shares to DB Trust Company, as Security Trustee.