(The following statement was released by the rating agency)
Aug 16 - Standard & Poor's Ratings Services said today that it has assigned
its 'BBB-' rating to International Lease Finance Corp.'s (ILFC) senior notes
maturing in 2022, a shelf drawdown. ILFC will use proceeds for general corporate
purposes, including repayment of debt and the purchase of aircraft.
The ratings on Los Angeles-based ILFC reflect the company's position as one of
the two largest global aircraft lessors and its improved liquidity following a
substantial amount of debt refinancings since 2010. In addition, Standard &
Poor's expects the company to continue its satisfactory cash generation as
demand for aircraft leasing improves gradually, barring weaker than expected
economic conditions, particularly in Europe. The rating also factors in ILFC's
remaining substantial debt maturities in 2013, exposure to the cyclical and
competitive global airline industry, and capital intensity and operating
leverage (two common characteristics of the aircraft leasing business). We
categorize ILFC's business risk profile as 'satisfactory,' its financial risk
profile as 'significant,' and its liquidity as 'adequate' under our criteria.
Our rating on ILFC currently includes one notch for potential support from
ILFC's ultimate parent, American International Group Inc. (AIG). AIG provided
support in 2008 and 2009 by lending ILFC funds to meet debt maturities. On
Sept. 1, 2011, ILFC Holdings Inc. (a recently created holding company,
unrated) filed an IPO registration statement with the SEC. Prior to the
planned IPO, a subsidiary of AIG will transfer its shares of ILFC to ILFC
Holdings. The filing states that AIG has determined that ILFC is not one of
its core businesses, and that AIG plans to sell at least 20% of its interest
in ILFC.
The outlook is stable. We believe that recent financings, in combination with
expected cash from operations, should be sufficient to meet ILFC's 2012 debt
maturities. However, 2013 maturities could still exceed expected cash from
operations.
We could raise the rating if the company is able to match future debt
maturities and capital expenditures with annual cash from operations and
revolver availability, if debt to capital remains less than 75%, and if funds
from operations to debt improves to about 15%.
Although less likely, we could lower our ratings on the company if we sense an
increased uncertainty about ILFC's ability to repay upcoming debt maturities
with new borrowings, proceeds from asset sales, and internal cash generation;
or if we feel AIG is less likely to provide supplementary cash infusions, if
needed. If AIG goes ahead with the IPO of ILFC, we will no longer be able be
include one notch of support under our criteria. However, we may raise the
stand-alone credit profile of ILFC to reflect its improved liquidity and if we
expect that the company will maintain moderate leverage, possibly offsetting
that one notch of support.
RELATED CRITERIA AND RESEARCH
-- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
-- Business Risk/Financial Risk Matrix Expanded, May 27, 2009
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
RATINGS LIST
International Lease Finance Corp.
Corporate credit rating BBB-/Stable/--
New Rating
Senior notes due in 2022 BBB-
(Caryn Trokie, New York Ratings Unit)
Keywords:
(Caryn.Trokie@thomsonreuters.com; 646-223-6318; Reuters Messaging: rm://caryn.trokie.reuters.com@reuters.net)
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