S&P may upgrade AWAS

Standard & Poor's said it placed its ratings, including the BB corporate credit rating, on AWAS Aviation Capital Ltd. on CreditWatch with positive implications.

The agency said the CreditWatch listing follows AWAS' announcement that its board of directors had approved the conversion of $800 million of shareholder loans into equity. The conversion of shareholder loans would reduce AWAS' debt to capital by about 8% to the high-70% area from the mid-80% area.

However, because the company will still carry a heavy debt burden, which S&P expects to increase as it uses debt to fund new aircraft deliveries, the agency said it expects funds from operations to debt to remain at about 9%.

"The ratings on AWAS reflect its position as a large provider of aircraft operating leases and its diversified fleet and airline customer base," said S&P credit analyst Betsy Snyder in a news release.

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