New York, April 04, 2018 -- Moody's Investors Service affirmed the Baa3 senior unsecured ratings
of AerCap Ireland Capital D.A.C, AerCap Global Aviation
Trust and International Lease Finance Corporation and upgraded to Ba1(hyb)
from Ba2(hyb) the junior subordinated debt rating of AerCap Global Aviation
Trust and the preferred stock ratings of ILFC E-Capital Trust I
and ILFC E-Capital Trust II. These entities are subsidiaries
of AerCap Holdings N.V. (AerCap, unrated).
The outlook for the ratings remains stable.
Upgrades:
..Issuer: AerCap Global Aviation Trust
....BACKED Junior Subordinated Regular Bond/Debenture,
Upgraded to Ba1 (hyb) from Ba2 (hyb)
..Issuer: ILFC E-Capital Trust I
....BACKED Pref. Stock, Upgraded
to Ba1 (hyb), stable, from Ba2 (hyb), stable
..Issuer: ILFC E-Capital Trust II
....BACKED Pref. Stock, Upgraded
to Ba1 (hyb), stable, from Ba2 (hyb), stable
Affirmations:
..Issuer: AerCap Ireland Capital D.A.C
....BACKED Senior Unsecured Regular Bond/Debenture,
Affirmed Baa3, stable
....BACKED Senior Unsecured Shelf, Affirmed
(P)Baa3
..Issuer: AerCap Global Aviation Trust
....BACKED Senior Unsecured Shelf, Affirmed
(P)Baa3
..Issuer: International Lease Finance Corporation
....Pref. Stock, Affirmed Ba2
(hyb), stable
....Senior Secured Regular Bond/Debenture,
Affirmed Baa2, stable
....Senior Unsecured Regular Bond/Debenture,
Affirmed Baa3, stable
..Issuer: Delos Finance SARL
....BACKED Senior Secured Bank Credit Facility,
Affirmed Baa2, stable
..Issuer: Flying Fortress Holdings, LLC
....BACKED Senior Secured Bank Credit Facility,
Affirmed Baa2
Outlook Actions:
..Issuer: AerCap Global Aviation Trust
....Outlook, Remains Stable
..Issuer: AerCap Ireland Capital D.A.C
....Outlook, Remains Stable
..Issuer: Delos Finance SARL
....Outlook, Remains Stable
..Issuer: Flying Fortress Holdings, LLC
....Outlook, Remains Stable
..Issuer: ILFC E-Capital Trust I
....Outlook, Remains Stable
..Issuer: ILFC E-Capital Trust II
....Outlook, Remains Stable
..Issuer: International Lease Finance Corporation
....Outlook, Remains Stable
RATINGS RATIONALE
Moody's affirmed AerCap's senior unsecured ratings based on
strong operating performance and effective liquidity and capital management
over the past year, which has solidified the company's leading
franchise positioning in aircraft leasing. AerCap has also continued
to improve fleet composition through the sale of older aircraft and investment
in new models, while strengthening liquidity as deliveries from
its committed orders with The Boeing Company and Airbus SE increased.
The affirmation also reflects the company's positive record of earnings,
cash flow and capital generation since acquiring larger competitor International
Lease Finance Corporation (ILFC) in 2014. Though competition within
the aircraft leasing sector has intensified, Moody's expects
that AerCap will continue to generate profitability that is stronger than
most rated peers.
Moody's upgraded the junior subordinated debt and trust preferred
stock ratings after assessing the securities' priority of claim
in the capital structure of each respective issuer and of AerCap,
which shares recourse on the securities on a junior subordinated basis,
and in light of AerCap's complex legal organizational structure.
In Moody's view, the seasoning of AerCap's risk management
and demonstrated consistency of execution since acquiring ILFC lowers
the potential loss given default on junior securities relating to organizational
complexity.
Constraints on AerCap's ratings include exposure to the cyclical airline
industry, significant speculative aircraft purchase commitments,
and debt to tangible net worth leverage (including Moody's adjustments)
higher than certain peers. The stable rating outlook is based on
Moody's expectation that AerCap will continue to generate profitability
higher than most peers, effectively manage liquidity and leverage,
and improve fleet composition.
Moody's could upgrade the ratings if AerCap: 1) increases
and maintains a ratio of tangible common equity to tangible managed assets
materially above 20%; 2) meaningfully reduces concentrations
in its top ten airline customers; 3) reduces secured debt/gross tangible
assets to 20% or less; and 4) maintains strong liquidity and
pre-tax profitability above the peer median.
Moody's could downgrade AerCap's ratings if the company's operating
prospects unexpectedly weaken, liquidity weakens in relation to
upcoming expenditures, the company pursues a strategy that increases
fleet residual risks, or its leverage increases materially from
the current level.
The principal methodology used in these ratings was Finance Companies
published in December 2016. Please see the Rating Methodologies
page on www.moodys.com for a copy of this methodology.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the credit rating action on the support provider and in relation to
each particular credit rating action for securities that derive their
credit ratings from the support provider's credit rating.
For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and
in relation to a definitive rating that may be assigned subsequent to
the final issuance of the debt, in each case where the transaction
structure and terms have not changed prior to the assignment of the definitive
rating in a manner that would have affected the rating. For further
information please see the ratings tab on the issuer/entity page for the
respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Mark L. Wasden
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Ana Arsov
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
