Moody's rates ILFC's benchmark senior unsecured notes Ba3
New York, August 16, 2012 -- Moody's Investors Service assigned a Ba3 rating to International Lease
Finance Corporation's (ILFC) benchmark senior unsecured notes maturing
2022 (Notes). The firm's Ba3 Corporate Family rating and stable
outlook are unchanged.
RATINGS RATIONALE
The terms of the Notes are consistent with ILFC's existing unsecured debt
issuance. The Notes will rank pari passu with ILFC's other unsecured
debt. The rating of the Notes is based on ILFC's fundamental credit
characteristics and the position of the Notes in ILFC's capital structure.
ILFC's Ba3 Corporate Family rating is based on its leading global franchise
positioning, manageable and relatively balanced geographic,
aircraft, and customer risk exposures and resilient operating cash
flow. The rating also recognizes the significant progress ILFC
has made in restructuring its liabilities, building liquidity and
reducing leverage since the beginning of 2010.
Contrasting this, we believe that ILFC faces challenges relating
to sustaining lease margin improvements and generating attractive returns
on equity. A key concern relates to the effect of weaker European
economic conditions on air travel volumes, aircraft demand and lease
rates, and airline credit quality; fuel price volatility and
higher new aircraft production rates could add to lease rate pressures.
Other credit challenges include the monoline and cyclical nature of ILFC's
business, its exposure to aircraft residual value risks, and
its reliance on confidence-sensitive wholesale funding.
The rating outlook is stable, reflecting our expectation that ILFC
will continue to maintain adequate liquidity and capital cushions,
but that improvement in profitability could be slow to develop in the
near term.
We rate ILFC based on its intrinsic characteristics and do not incorporate
an assumption of support from ILFC's parent AIG into the rating.
No longer a core holding of AIG, ILFC has strengthened its stand-alone
profile and transitioned toward greater operating and financial independence,
reducing the need for and expectation of AIG support. We expect
that AIG will eventually divest ILFC through a public offering of shares.
In its last ILFC rating action on June 15, 2012, Moody's
upgraded the Corporate Family and senior unsecured ratings to Ba3 from
B1 and revised the rating outlook to stable. The debt ratings of
Delos Aircraft Inc., Flying Fortress Inc., ILFC
E-Capital Trust I, and ILFC E-Capital Trust II were
similarly upgraded by one notch and the rating outlooks revised to stable.
The principal methodology used in this rating was the Finance Company
Global Rating Methodology published March 2012. Please see the
Credit Policy page on www.moodys.com for a copy of this
methodology.
International Lease Finance Corporation, headquartered in Los Angeles,
California, is a major owner-lessor of commercial aircraft.
REGULATORY DISCLOSURES
The Global Scale Credit Ratings on this press release that are issued
by one of Moody's affiliates outside the EU are endorsed by Moody's
Investors Service Ltd., One Canada Square, Canary Wharf,
London E 14 5FA, UK, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that has issued a particular Credit Rating is available on www.moodys.com.
For ratings issued on a program, series or category/class of debt,
this announcement provides relevant 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 relevant regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides relevant 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.
Information sources used to prepare the rating are the following:
parties involved in the ratings, public information, and confidential
and proprietary Moody's Investors Service information.
Moody's considers the quality of information available on the rated
entity, obligation or credit satisfactory for the purposes of issuing
a rating.
Moody's adopts all necessary measures so that the information it
uses in assigning a rating is of sufficient quality and from sources Moody's
considers to be reliable including, when appropriate, independent
third-party sources. However, Moody's is not
an auditor and cannot in every instance independently verify or validate
information received in the rating process.
Please see the ratings disclosure page on www.moodys.com
for general disclosure on potential conflicts of interests.
Please see the ratings disclosure page on www.moodys.com
for information on (A) MCO's major shareholders (above 5%) and
for (B) further information regarding certain affiliations that may exist
between directors of MCO and rated entities as well as (C) the names of
entities that hold ratings from MIS that have also publicly reported to
the SEC an ownership interest in MCO of more than 5%. A
member of the board of directors of this rated entity may also be a member
of the board of directors of a shareholder of Moody's Corporation;
however, Moody's has not independently verified this matter.
Please see Moody's Rating Symbols and Definitions on the Rating Process
page on www.moodys.com for further information on the meaning
of each rating category and the definition of default and recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com
for the last rating action and the rating history.
The date on which some ratings were first released goes back to a time
before Moody's ratings were fully digitized and accurate data may not
be available. Consequently, Moody's provides a date that
it believes is the most reliable and accurate based on the information
that is available to it. Please see the ratings disclosure page
on our website www.moodys.com for further information.
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.
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: 212-553-0376
SUBSCRIBERS: 212-553-1653
Robert Franklyn Young
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's assigns Ba3 rating to ILFC's benchmark senior unsecured notes
