AAR Completes Additional Financing and Partial Repurchase Of 1993 7-1/4% Notes

WOOD DALE, Ill., /PRNewswire-FirstCall/ -- AAR (NYSE: AIR) today announced the completion of a $30 million secured revolving credit facility with Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services, Inc., bearing interest at LIBOR plus 300 basis points. The Company also announced the repurchase of $10 million and the exchange for new notes of $16.9 million of the 1993 7-1/4% Notes due October 15, 2003 in a privately negotiated transaction with a single holder. The $16.9 million of new notes bear interest at 8% per annum and are due ratably over 3 years commencing October 15, 2004. The balance outstanding on the Company's 1993 7-1/4% Notes is now $22.6 million.

Commenting on the transactions, AAR President and CEO David P. Storch said, "These transactions complete the second series of planned transactions to increase the Company's liquidity, replace expiring bank lines and retire the Company's 1993 7-1/4% Notes due October 15, 2003. We expect these transactions combined with anticipated future financings and internal cash generation initiatives to provide the Company with adequate liquidity to meet its maturing credit obligations and support its operations and growth initiatives."

AAR (NYSE: AIR) is the leading provider of aftermarket support to the worldwide aviation/aerospace industry. Products and services include customized inventory management and logistics programs, encompassing supply, repair and manufacture of spare parts and systems. Headquartered in Wood Dale, Illinois, AAR serves commercial and government aircraft fleet operators and independent service customers throughout the world. Further information can be found at www.aarcorp.com.

This press release contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on beliefs of Company management, as well as assumptions and estimates based on information currently available to the Company, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated, including those factors discussed under Item 7, entitled "Factors Which May Affect Future Results", included in the Company's May 31, 2002 Form 10-K. Should one or more of these risks or uncertainties materialize adversely, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described. These events and uncertainties are difficult or impossible to predict accurately and many are beyond the Company's control. The Company assumes no obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. For additional information, see the comments included in AAR's filings with the Securities and Exchange Commission.

SOURCE AAR CORP.

CONTACT: Timothy J. Romenesko, Vice President & Chief Financial Officer of AAR, +1-630-227-2090, tromenesko@aarcorp.com