TEXT-S&P puts AWAS Aviation Capital 'BB' rating on watch positive

Overview
-- On Oct. 5, 2012, Dublin-based aircraft lessor AWAS Aviation Capital
Ltd. announced that its board of directors had approved the conversion of $800
million of shareholder loans into equity.
-- We are placing our ratings on AWAS, including the 'BB' corporate
credit rating, on CreditWatch with positive implications.
-- We expect to raise the ratings, including the corporate credit rating
to 'BB+' from 'BB', when the conversion is completed.

Rating Action
On Oct. 5, 2012, Standard & Poor's Ratings Services placed its ratings,
including the 'BB' corporate credit rating, on AWAS Aviation Capital Ltd. on
CreditWatch with positive implications.

Rationale
The CreditWatch listing follows AWAS' Oct. 5 announcement that its board of
directors had approved the conversion of $800 million of shareholder loans
into equity. The conversion of shareholder loans would reduce AWAS' debt to
capital by about 8% to the high-70% area from the mid-80% area. However,
because the company will still carry a heavy debt burden, which we expect to
increase as it uses debt to fund new aircraft deliveries, we expect funds from
operations to debt to remain at about 9%.

The ratings on AWAS reflect its position as a large provider of aircraft
operating leases and its diversified fleet and airline customer base. Limiting
credit considerations include exposure to cyclical demand and lease rates for
aircraft, a weaker financial profile than some of its competitors, and a
substantial percentage of encumbered assets, constraining options for raising
capital. The ratings incorporate our expectations that these trends will
continue over the next several quarters. Standard & Poor's characterizes AWAS'
business risk profile as "satisfactory," its financial risk profile as
"significant," and its liquidity as "adequate" under our criteria.

CreditWatch
We expect to raise the ratings on AWAS, including the corporate credit rating
to 'BB+' from 'BB', when the conversion of shareholder loans into equity is
completed.

Related Criteria And Research
2008 Corporate Criteria: Analytical Methodology, April 15, 2008

Ratings List
Ratings Placed On CreditWatch
To From
AWAS Aviation Capital Ltd.
Corporate Credit Rating BB/Watch Pos/-- BB/Stable/--
Senior Secured BBB-/Watch Pos BBB-
Recovery Rating 1 1

Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left
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