Aug 24 - Fitch Ratings has affirmed AerCap Holdings N.V.'s (AER)
long-term Issuer Default Rating (IDR) at 'BBB-'. The Rating Outlook is Stable. A
full list of ratings is provided at the end of this release.
Today's affirmation follows AER's announcement that it has repurchased an
additional $120 million common shares from one of its major shareholders and
simultaneously upsized its share repurchase authorization to $320 million from
$200 million. Over the past two months, AER has repurchased approximately $175
million from Cerberus Capital Management, L.P. (Cerberus), which now owns
approximately 10% of the company. An additional $104 million is available under
the current share repurchase authorization, which expires in June 2013.
The recent share repurchases have had only a modest impact on AER's leverage and
liquidity, which continue to support its conservative credit profile. Fitch
expects the company to be able to maintain its debt-to-equity ratio at or below
3.0x, as its secured debt amortizes fairly rapidly. Furthermore, AER continues
to maintain an adequate liquidity cushion to meet debt and purchase commitment
obligations over the next year. In Fitch's view, the recent share repurchases
have been opportunistic in nature and do not impact the company's conservative
approach to managing its capital structure and leverage.
RATING DRIVERS AND SENSITIVITIES
Negative rating actions could result if Fitch comes to view AER's capital
management as becoming more aggressive or if the company fails to maintain its
debt-to-equity ratio at or below 3.0x over the long term. Weakened operating
performance and/or deterioration in the quality of the aircraft fleet could also
lead to negative rating actions. Conversely, further diversification of funding
sources, including a meaningful unsecured component, could potentially lead to
positive momentum over a longer-term time horizon.
AER is a global aviation services company providing aircraft leasing and
management services to its customers around the world. The company owns and
manages approximately 350 aircraft with total assets of $9.1 billion, making it
one of the largest commercial aircraft lessor in the world. AER is headquartered
in the Netherlands with offices in Ireland, the United States, China, Singapore
and the UAE. The company is listed on the NYSE under the ticker symbol AER.
In accordance with Fitch's policies, the issuer appealed and provided additional
information to Fitch that resulted in a rating action that is different than the
original rating committee outcome.
Fitch has affirmed the following ratings:
AerCap Holdings N.V.
--Long-term IDR at 'BBB-'; Outlook Stable.
AerCap Aviation Solutions B.V.
--Senior unsecured debt rating at 'BBB-'.
AerCap Dutch Aircraft Leasing I B.V.
AerCap Dutch Aircraft leasing IV B.V.
AerCap Dutch Aircraft Leasing VII B.V.
AerCap Engine Leasing Limited
AerCap Ireland Limited
AerCap Note Purchaser (IOM) Limited
AerCap Partners 767 Limited
AerCap Partners I Limited
AerFI Sverige AB
AerFunding 1 Limited
AerVenture Leasing 1 Limited
Burgundy Aircraft Leasing Limited
Flotlease 973 (Bermuda) Limited
Flotlease MSN 3699 Limited
Flotlease MSN 973 Limited
Genesis Portfolio Funding 1 Limited
GLS Atlantic Alpha Limited
Harmonic Aircraft Leasing Limited
Melodic Aircraft Leasing Limited
Peony Aircraft Holdings Limited
Polyphonic Aircraft Leasing Limited
Rouge Aircraft Leasing Limited
Sapa Aircraft Leasing 2 BV
Sapa Aircraft Leasing BV
Symphonic Aircraft Leasing Limited
Synchronic Aircraft Leasing Limited
Triple Eight Aircraft Leasing Limited
Wahaflot Leasing 3699 (Bermuda) Limited
Westpark 1 Aircraft Leasing Limited
--Senior secured bank debt 'BBB'.
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