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TEXT-S&P rates International Lease Finance Corp notes
March 14, 2012 / 7:08 PM / in 6 years

TEXT-S&P rates International Lease Finance Corp notes

March 14 - Standard & Poor's Ratings Services said today that it has
assigned its 'BBB-' rating to International Lease Finance Corp.'s    
   (ILFC's) senior notes maturing in 2015 and 2019, a shelf drawdown. The
aircraft lessor will use proceeds to repay all debt outstanding under its $750
million term loan due March 17, 2015. The remainder will go toward repayment of
other debt and the purchase of aircraft.	
	
The ratings on Los Angeles-based ILFC reflect the company's position as one of 	
the two largest aircraft lessors globally. In addition, we expect the company 	
to continue its satisfactory cash generation as the aviation market improves 	
gradually. The company has made significant progress in addressing large 	
upcoming debt maturities in 2012, but it still has substantial debt 	
outstanding that matures in 2013. The rating also factors in ILFC's exposure 	
to the cyclical and competitive global airline industry and its capital 	
intensity and operating leverage (two common characteristics of the aircraft 	
leasing business). We categorize ILFC's business risk profile as 	
"satisfactory," its financial risk profile as "significant," and its liquidity 	
as "adequate" under our criteria.	
	
Our rating on ILFC currently includes one notch for potential support from 	
ILFC's ultimate parent, American International Group Inc. (AIG). AIG provided 	
support in 2008 and 2009 by lending ILFC money to meet debt maturities. On 	
Sept. 1, 2011, ILFC Holdings Inc. (a recently created holding company, 	
unrated) filed an IPO registration statement with the SEC. Prior to the 	
planned IPO, a subsidiary of AIG will transfer its shares of ILFC to ILFC 	
Holdings. The filing states that AIG has determined that ILFC is not one of 	
its core businesses, and that AIG plans to sell at least 20% of its interest 	
in ILFC. 	
	
The outlook is stable. We believe that recent financings, in combination with 	
expected cash from operations, should be sufficient to meet ILFC's 2012 debt 	
maturities, although 2013 maturities still exceed expected cash from 	
operations by more than $1 billion. We could raise the rating if the company 	
is able to match future debt maturities and capital expenditures with annual 	
cash from operations and revolver availability, if debt to capital remains 	
less than 75%, and if funds from operations to debt improves to about 15%. 	
Although less likely, we could lower our ratings on the company if we become 	
less certain about ILFC's ability to repay upcoming debt maturities with new 	
borrowings, proceeds from asset sales, and internal cash generation. We could 	
also lower the ratings if we feel AIG is less likely to provide supplementary 	
cash infusions, if needed. If AIG goes ahead with the IPO of ILFC, we will no 	
longer be able be include one notch of support under our criteria. However, we 	
may raise the stand-alone credit profile of ILFC--possibly offsetting that one 	
notch of support--to reflect improved liquidity if we expect the company will 	
maintain moderate leverage. 	
	
RATINGS LIST	
International Lease Finance Corp.	
 Corporate credit rating                      BBB-/Stable/--	
	
Ratings Assigned	
 Senior unsecured notes due 2015 and 2019     BBB-

0 : 0
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