KBRA Assigns BBB+ Issuer Rating and BBB Senior Unsecured Debt Rating to Avolon Holdings Limited

NEW YORK--()--Kroll Bond Rating Agency (KBRA) has assigned an issuer rating of BBB+ and a senior unsecured debt rating of BBB to Avolon Holdings Limited (“Avolon” or “the Company”), an aircraft leasing company headquartered in Dublin, Ireland. The Outlook on the ratings is Stable.

The BBB+ issuer rating of Avolon reflects the strength of the Company’s leading market position, seasoned management team, young and in-demand fleet, focus on lowering and maintaining relatively low leverage, as well as a staggered and diversified funding profile. The ratings are also driven by the growing strength of Avolon’s global franchise fostered by the demonstrated support and enhanced relationships provided through its parent companies, Bohai Capital (Bohai) and HNA Group (HNA). The Company also benefits from the quality of its order book, as well as upward trending profitability metrics, and a stable industry outlook. The ratings are constrained by the inherent risks associated with the recent acquisition of the aircraft leasing business of CIT (“CIT acquisition”), such as integrating a sizable platform and slightly less attractive fleet, high level of encumbered assets, high leverage levels at Bohai, its immediate parent as well as limited transparency at HNA, its ultimate parent. Given the Company’s relatively high level of asset encumbrance, the senior unsecured rating of Avolon is rated one notch below the issuer rating at BBB.

KBRA’s rating report for Avolon is available here.

The ratings are based on KBRA’s Finance Company Rating Methodology, published April 1, 2013.

Related Publications: (available at www.kbra.com)

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About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Contacts

Analytical:
Kroll Bond Rating Agency
Danise Chui, 646-731-2406
Director
dchui@kbra.com
or
Marjan Riggi, 646-731-2354
Managing Director
mriggi@kbra.com

Contacts

Analytical:
Kroll Bond Rating Agency
Danise Chui, 646-731-2406
Director
dchui@kbra.com
or
Marjan Riggi, 646-731-2354
Managing Director
mriggi@kbra.com