S&P rates BOC Aviation notes BBB+

Standard & Poor’s said it assigned its BBB+ long-term issue rating to a proposed issue of U.S. dollar-denominated senior unsecured notes by BOC Aviation Pte. Ltd. (A-/stable/--; axAA/--) under the company’s US$5 billion global medium-term notes program.

S&P said the rating on BOC Aviation reflects the company’s good cash flow stability from long leases, sound competitive position, and support from its 100%-owner Bank of China Ltd. (A/stable/A-1; cnAA+/cnA-1). Tempering these strengths are BOC Aviation’s moderately higher leverage than other rated peers and its exposure to the industry’s cyclical demand and aircraft lease rates.

“We assess BOC Aviation’s stand-alone credit profile at ‘bbb-.’ Our rating incorporates a three-notch uplift because we consider BOC Aviation to be a subsidiary with ‘strategically important’ group status to its parent,” S&P said in a news release.

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