S&P slashes Avation

S&P said it downgraded Avation plc to CCC from B and the rating on its $349 million senior unsecured notes to CCC- from B and revised the recovery ratings on the notes to 5 from 4. The ratings remain on CreditWatch with negative implications.

The downgrade mirrors the refinancing risk on the $349 million of notes due in May 2021, S&P said.

“In our view, the company will increasingly be dependent on favorable funding conditions outside its control to repay or refinance the $349 million of notes. Due to the sizable amount of the bond compared with the company's size and its limited capacity to generate substantial free operating cash flows, Avation will be heavily reliant on debt capital markets, and hence on investor appetite, yields and covenant conditions to refinance the notes,” S&P said in a press release.

In the last two months, two of the company’s clients entered into administration and one of them accounted for about 20% of Avation’s monthly revenues, S&P said.

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