S&P: BOC Aviation notes BBB-

Standard & Poor’s said it assigned a BBB- long-term issue rating to the A$200 million senior unsecured notes issued by BOC Aviation Pte. Ltd. under its $5 billion euro medium-term notes program.

The issue rating is one notch below the company’s corporate credit rating because the company’s total secured debt exceeds the notching threshold, S&P said.

BOC Aviation expects to use the proceeds for capital spending and general corporate purposes, the agency said.

The rating reflects the company’s good cash flow stability from long leases, sound competitive position and support from its 100% owner, Bank of China Ltd., S&P said.

Tempering these strengths are BOC Aviation’s moderately higher leverage than peers and its exposure to the industry’s cyclical demand and aircraft-lease rates, the agency said.

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