Avolon’s senior unsecured debt rating increased by KBRA

victoria@aviationnews-online.com
By victoria@aviationnews-online.com July 15, 2019 09:57

Avolon’s senior unsecured debt rating increased by KBRA

Avolon Aviation Consultancy has announced that Kroll Bond Rating Agency (KBRA) has upgraded its senior unsecured debt rating from BBB to BBB+, aligning it with the issuer rating.

The alignment to issuer rating of BBB+ is driven by the significant progress Avolon has made in reducing the amount of secured funding.

A statement from KBRA said: “The upgrade is further supported by the company’s strong credit metrics as well as its improved ownership and governance structure. In KBRA’s view, the increase in unencumbered assets, is an important component of reducing the constraints to liquidity in stress scenarios further strengthening Avolon’s forward looking financial and operational flexibility.”

As of March 31, 2019, Avolon’s total unencumbered assets exceeded $11 billion, compared to $7.35 billion of unsecured debt.

Subsequently in April, the company issued an additional $2.5 billion of senior unsecured debt which was then used to repay $1.8 billion of previously issued secured debt.

With the $2.5 billion issuance, in the second quarter, Avolon’s unsecured debt now represents the majority of liabilities in its capital structure.

The BBB+ issuer and senior unsecured rating of Avolon reflects the core strength of the company’s business – leading market position, seasoned management team, young and in-demand fleet, strong credit metrics including low leverage, strong profitability, abundant liquidity as well as a staggered and diversified funding profile, KBRA says.

Avolon recently released its second quarter 2019 trading update which showed that it owned and managed a fleet of 530 aircraft with total orders and commitments for 393 new technology aircraft.

During the Paris Air Show 2019, the company announced an order for 140 LEAP-1A engines from CFM International to power 70 Airbus A320neo family aircraft in its order book – valued at $2 billion.

victoria@aviationnews-online.com
By victoria@aviationnews-online.com July 15, 2019 09:57