Fitch lifts Avolon view to positive

Fitch Ratings said it affirmed the long-term issuer default rating for Avolon Holdings Ltd. at BB.

Fitch also said it affirmed the long-term issuer default ratings and senior unsecured debt ratings of subsidiaries Avolon Holdings Funding Ltd. and Park Aerospace Holdings Ltd. at BB.

The outlook also was revised to positive from stable.

The positive outlook follows news that Global Aviation Leasing Co., Ltd., a subsidiary of Avolon's owner, Bohai Capital Holding Co., Ltd., has agreed to sell 30% of Avolon shares to a minority interest shareholder, ORIX Aviation Systems Ltd., which is a subsidiary of ORIX Corp.

The sale is for about $2.2 billion, Fitch noted.

The transaction is expected to close in the fourth quarter of 2018.

ORIX's ratings and outlook are unaffected by the news.

The positive outlook reflects the improved credit quality of Avolon's owners and the enhanced governance framework set forth under the shareholder agreement, which further protects Avolon's creditors by supplementing the pre-existing mandatory redemption covenant, Fitch said.

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