SMBC Aviation Capital has revealed that its issuer credit rating and senior unsecured rating has been upgraded to ‘A-’ from ‘BBB+’ by S&P Global Ratings (S&P). This, alongside the company’s A- rating from Fitch means that SMBC Aviation Capital holds the joint highest rating of any company in the aircraft leasing industry.
The change was prompted by the announcement yesterday (November 29) that the company received a $1 billion capital contribution from its shareholders, Sumitomo Mitsui Financial Group (SMFG) and Sumitomo Corp. comprising of $700 million of equity from and a $300 million subordinated loan.
Commenting on the capital, Peter Barrett, CEO, SMBC Aviation Capital said, “We are pleased to announce that we have received this new capital. It is a strong message from our shareholders of their confidence in our strategy.
“Given the strength of our balance sheet, we are well placed for the future to continue to provide a broad range of products and services to our customers that will differentiate us in a competitive market.”
Masaki Tachibana, President, SMFL added, “SMBC Aviation Capital has a robust business model and the completion of this capital increase ensures that the company can continue to set itself apart from the competition, as it prepares for continued growth.”
SMFG and Sumitomo Corp. have changed their respective ownership ratios to 50% each in Sumitomo Mitsui Finance and Leasing Company (SMFL), the primary leasing vehicle between both companies. SMFL now retains 68% of SMBC Aviation Capital with SMBC retaining 32%.
S&P also identified SMBC Aviation Capital as having one of the youngest and most liquid aircraft portfolios in the aircraft leasing sector.
Commenting on the upgrade, Barrett, said: “We are pleased to receive this upgrade from S&P, which reflects the strength of our platform, the quality of our portfolio and our shareholders’ commitment to this business, which was further evidenced today when we received a $1 billion capital contribution. I would like to acknowledge our team which has played an important role in today’s announcements. They, alongside our shareholders, are what differentiates us in a competitive market.”