Avolon's issuer and senior unsecured notes ratings have been upgraded by both Fitch and Moody's on May 12, 2025.
Fitch has upgraded Avolon from BBB- to BBB, and Moody's has upgraded Avolon from Baa3 to Baa2, both with a stable outlook.
“The upgrades from Fitch and Moody's reflect our continued strong financial performance and disciplined growth,” said Avolon CFO Ross O'Connor. “These improved ratings highlight the strength of our balance sheet and high levels of liquidity, positioning us to build on our financila success to date.”
Fitch and Moody's have also made similar upgrades to their issue-level rating on all outstanding senior unsecured notes issued by Avolon's wholly owned subsidiary, Avolon Holdings Funding.
In Fitch's rationale, the rating agency said the company's enhanced funding flexibility, its “high-quality” portfolio and franchise strength, along with its sizeable orderbook were key drivers for the rating. Fitch added that the company's $10.1bn liquidity, as of March 31, 2025, was sufficient and in line with its expected capital expenditures and debt maturities.
Moody's rationale echoed similar sentiments. The agency added: “Our upgrade of Avolon's ratings reflects the company's strengthening profitability and improving aircraft fleet and customer composition.”
The agency also highlighted Avolon's “strong competitive positioning in commercial aircraft leasing” with its fleet of 604 commercial aircraft and total assets of $34.9bn, as of the end of March.
Avolon had sold 34 aircraft in the first quarter of the year, as well as closing its acquisition of Castlelake in the first quarter, which added 106 aircraft to its fleet, in addition to the nine other aircraft acquired during the quarter.
Avolon's upgrade comes as Fitch affirmed its ratings on other lessors the same day, including Air Lease, BOC Aviation, Macquarie AirFinance, and SMBC Aviation Capital.
Air Lease was affirmed at BBB with a stable outlook; BOC Aviation was affirmed at A- with a stable outlook; Macquarie AirFinance was affirmed at BB+ with its outlook revised to positive from stable; and SMBC was affirmed at BBB+ with a stable outlook.