Moody’s might lift Avolon

Moody's Investors Service said it is reviewing for upgrade the Ba2 corporate family rating of Avolon Holdings Ltd. and the Ba3 senior unsecured ratings of subsidiaries Avolon Holdings Funding Ltd. and Park Aerospace Holdings Ltd.

The agency said the action follows the announcement by Avolon's parent, Bohai Capital Holding Co., Ltd., that it has agreed to sell a 30% interest in Avolon to ORIX Corp. (A3 stable) for $2.2 billion.

Moody's said the review of Avolon's ratings is based on the significant investment commitment by ORIX, a strategic investor with a strong credit profile, as well an expected reduction in Avolon's governance risks relating to financially weaker parent Bohai Capital and its controlling shareholder HNA Group, as ORIX exerts influence on Avolon's strategy and operations through its appointed directors on Avolon's board.

Additionally, the agency said it expects that ORIX's investment will lead to business and funding synergies, based on ORIX's established strength in aircraft finance through operating subsidiary ORIX Aviation and its relationships with investors and airlines.

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