S&P raises its rating for Irish aircraft lessors
DUBLIN-BASED aircraft lessor SMBC Aviation has secured an A- rating from Standard & Poor’s, making it the joint highest-rated company in the sector.
It already had an A- rating from Fitch. Dublin-based lessor BOC Aviation also has A- ratings at both Fitch and Standard & Poor’s (S&P).
S&P upgraded SMBC from a BBB+ rating after the lessor received a $1bn capital injection from its Japanese owners. SMBC is owned by firms in Japan’s Sumitomo Mitsui banking group. That capital boost included $700m of equity and a $300m subordinated loan.
Speaking to the Irish Independent, SMBC Aviation CEO Peter Barrett said that there had not been a specific intention by the lessor to secure an additional A-level rating.
However, he said that the rating did reflect the lessor’s high-quality aircraft portfolio.
He said the capital injection received last month had been a vote of confidence in the business, and welcomed the joint A-level rating from Fitch and S&P. “It’s nice to be able to go to your suppliers and say that you’re the strongest in the market,” he said.
He said the dual A-level ratings will also widen investor appeal for SMBC. “The stronger your rating, the broader the appeal,” he said.
SMBC raised $500m via a bond issue in July and now has three tranches of outstanding bonds, each of $500m, issued in 2016, 2017 and 2018.
SMBC Aviation Capital is the world’s fourth-biggest aircraft lessor, with an owned, managed, and on-order fleet of 663 jets. Its portfolio consists primarily of single-aisle jets.