Moody's Ratings (Moody's) has upgraded the ratings of Aircastle, including its long-term senior unsecured debt rating to Baa2 from Baa3 and its preferred stock rating to Ba1 (hyb) from Ba2 (hyb). Aircastle's outlook was changed to stable from positive.
Moody’s commented that the ratings upgrade was based on Aircastle's “consistent profitability and resilient business model anchored on strong liquidity, which benefits from the lack of an orderbook, and moderate leverage”.
The rating agency also noted that Aircastle's ownership by Marubeni and Mizuho Leasing Company, aided the company's financial stability by “facilitating access to funding alternatives”, adding that the ownership structure is “a key driver of this rating action”.
The ratings report goes on to highlight Aircastle’s “strong and resilient franchise focused on acquiring aircraft in the secondary market”, and that the lack of a new aircraft orderbook gives the company “greater financial flexibility than peers and a strong liquidity profile”.
Aircastle's current liquidity is supported by $223 million of cash, availability on its $1.0 billion revolving credit facility due February 2028, and additional availability on $1.1 billion of other revolving credit facilities. Moody’s notes that Aircastle’s liquidity is also aided by $8.0 billion of unencumbered assets.
Aircastle's leverage, measured by debt to tangible equity of 2.4x, is expected to edge higher as the company invests in younger aircraft, says Moody’s.
Although Aircastle’s older fleet is a credit concern for the rating agency, it notes that the lessor is acquiring newer aircraft, which is providing more resilience for fleet utilisation and financial performance.
Moody's Ratings upgrades Aircastle's senior unsecured rating to Baa2, outlook is stable
