Aug 16 - Fitch Ratings expects to assign a rating of 'BB' to International
Lease Finance Corp.'s (ILFC) benchmark size senior unsecured notes issuance
under its shelf registration with an expected maturity of 2022.
The expected debt issuance does not affect ILFC's existing long-term Issuer
Default Rating (IDR) of ' BB' or debt ratings. The Rating Outlook for ILFC
remains Stable. For further information on ILFC's existing ratings, please refer
to Fitch's press release 'Fitch Affirms International Lease Finance Corp.'s IDR
at 'BB'; Outlook Stable' dated Nov. 4, 2011.
Fitch notes that the proposed issuance is consistent with ILFC's overall
financing plans to repay near-term maturing debt obligations and for general
corporate purposes.
The notes are expected to rank equally in right of payment with existing senior
unsecured debt. Covenants are expected to be consistent with previously issued
senior unsecured debt including a limitation restricting ILFC's ability to incur
liens to secure indebtedness in excess of 12.5% of ILFC's consolidated net
tangible assets (excluding secured debt issued by certain non-restricted
subsidiaries of ILFC).
RATING DRIVERS AND SENSITIVITIES
ILFC's ratings are constrained by the company's lack of profitability over the
past two fiscal years, which has been caused by significant impairment charges
on older aircraft, as well as the weighted average age of its fleet, which is
older than Fitch-rated peers. Negative momentum for the ratings and/or Rating
Outlook could result from additional impairment charges that are material in
size, inability to access capital markets to fund debt maturities or purchase
commitments, deterioration in operating cash flow or a meaningful increase in
leverage. While positive rating momentum is not likely in the near term, over a
longer-term time horizon, positive drivers could include consistent
profitability, demonstrated funding flexibility and commitment to reduced
leverage levels and clarity regarding ownership structure.
ILFC is a market leader in the leasing and remarketing of commercial jet
aircraft to airlines around the world. As of June 30, 2012, ILFC owned an
aircraft portfolio with a net book value of approximately $35 billion,
consisting of 933 jet aircraft.
Fitch expects to assign the following rating:
--ILFC's proposed benchmark size senior unsecured notes 'BB'.
Fitch currently rates ILFC and its related subsidiaries as follows:
International Lease Finance Corp.
--Long-term Issuer Default Rating 'BB'; Outlook Stable;
--$3.9 billion senior secured notes 'BBB-';
--Senior unsecured debt 'BB';
--Preferred stock 'B'.
Delos Aircraft Inc.
--Senior secured debt 'BB'.
Flying Fortress Inc.
--Senior secured debt 'BB'.
ILFC E-Capital Trust I
--Preferred stock 'B'.
ILFC E-Capital Trust II
--Preferred stock 'B'.
Additional information is available at 'www.fitchratings.com'. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Financial Institutions Rating Criteria', Aug. 15, 2012;
--'Finance and Leasing Companies Criteria', Dec. 12, 2011.
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
Finance and Leasing Companies Criteria
(New York Ratings Team)
(e-mail: pam.niimi@thomsonreuters.com; Reuters Messaging: pam.niimi.reuters.com@reuters.net; Tel:1-646-223-6330;)
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