UPDATE: Bank of America Maintains Neutral on Aircastle LTD, Drops PO to $13.50, As Lower Rates on Lease Renewals Impede Growth

In a report published Monday, Bank of America maintained its Neutral rating on Aircastle Limited (NYSE: AYR), while dropping the aircraft leasing and rental company's PO from $14.50 to $13.50.Bank of America noted that, "Headwinds from early return/lease renewals impede growth 4Q base rentals increased 5% yoy as 13% growth from aircraft acquisitions was partially offset by 8pts of headwind from early return of planes and lower rates on lease renewals. These headwinds continue in 1Q13, and we expect base rentals to be flat-to-down in 2013. Revenues accrued owing to early returns increased 45% in CY12, but benefits from these maintenance revenues may lessen in 2013."Bank of America added, "with its relatively older fleet (14.7 simple average, 11.0 weighted by NBV) and greater mix of twin-aisle and freighter aircraft, AYR's assets are more cyclically sensitive than its peers, but the market for mid-age planes is much less competitive and AYR's access to unsecured debt at increasingly lower rates provides management with a competitive advantage."Aircastle LTD closed Friday at $13.36.