S&P might lift Avation notes

S&P said it placed the B issue-level rating on Avation plc's (B+/positive/--) senior unsecured notes on CreditWatch with positive implications.

The CreditWatch placement follows Avation's proposal to add $50 million to its existing $300 million unsecured issuance due May 2021, S&P said.

The company intends to use the proceeds to repay $49 million in senior secured debt.

“If the transaction is completed, we believe it will improve the recovery prospects for Avation's unsecured debt, which could lead to a one-notch upgrade,” the agency said in a news release.

“In our view, the proposed changes to Avation's capital structure would aid the recovery of the senior unsecured debt in the event of a payment default because we would expect more value to flow to the unsecured lenders.”

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