S&P rates Aviation Capital

Standard & Poor's said it assigned a BBB- rating to Aviation Capital Group Corp.'s $212 million 6% senior unsecured notes, series D, due April 5, 2018, along with the $28 million 6.8% senior unsecured notes, series E, due April 5, 2023.

The issues are rated one notch below the BBB corporate credit rating because of the large percentage of secured debt in the company's capital structure

The ratings reflect its position as a major provider of aircraft operating leases, ownership of new-technology aircraft with relatively stable asset values and potential support from parent, Pacific Life Insurance Co., S&P said.

The inherent risks of cyclical demand and lease rates for aircraft, along with the company's fairly high debt leverage are limiting credit considerations, the agency said.

The outlook is stable.

The company's 2011 credit metrics also were below expectations, S&P said.

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