- "Our preliminary conclusion is that we would lower AerCap's (AER +30.7%) corporate credit rating one notch to BB+ from BBB-," says S&P, putting the company on "CreditWatch with negative implications" due to the deal to buy ILFC (AIG +1.2%).
- The assumption of ILFC's debt, plus the debt to fund the acquisition, plus anticipated purchase accounting write-downs on ILFC's assets will push AerCap's debt-to-capital ratio to among the highest of eight aircraft leasing companies rated by S&P, says the agency. "We expect that the consolidated AerCap would generate solid cash flow and gradually de-lever following the merger, but would not restore its balance sheet for at least several years," says analyst Betsy Snyder.
- Previous coverage
S&P: AIG deal a threat to AerCap credit rating
Dec 16 2013, 12:57 ET