Ryanair is seeking a credit rating from Standard & Poor’s, which is widely expected to be the highest rating for an airline today. There has been a growing trend for airlines to be rated – or at least go through the ratings process – in order to access a greater range of aircraft finance products. Emirates went through the process to ensure financing of its A380 deliveries via the Doric Alpha EETC transaction last year, while Rolls Royce Partners Finance has succeeded in being rated just one notch under its parent even though it is not guaranteed by Rolls Royce. Turkish Airlines rating process is well underway and now Ryanair is seeking a rating. With export credit-backed financing becoming more expensive and commercial debt pricing becoming more attractive, as well as capital markets products becoming more accessible, it makes a lot of sense for Ryanair to be rated. The smart money is betting on Ryanair seeking a Euro-denominated EETC-like product. Although past Euro-denominated structures from Iberia and Air France have not performed well, there are many smart people in the aviation finance that could make this work and make it attractive to the right sort of investors. Watch this space.
2014 could see a Euro-denominated EETC
