S&P rates Avolon loan BBB-, notes BB-

S&P said it assigned a BB+ corporate credit rating to Avolon Holdings Ltd., which is a wholly owned subsidiary of Bohai Financial Investment Holding Co. Ltd.

The outlook is stable.

The agency also said it assigned a BBB- rating and 2 recovery rating to Avolon's proposed $5.5 billion secured term loan.

S&P also said it assigned BB- rating and 6 recovery rating to its subsidiary Park Aerospace Holdings Ltd.'s proposed $3 billion unsecured note issuance.

The proceeds from the secured term loan and the unsecured notes will be used to fund its $10 billion acquisition of C2 Aviation Capital LLC, the aircraft leasing business of CIT Group Inc.

The BB+ corporate credit rating reflects both the BB+ stand-alone credit profile on the company and an assessment that it is an insulated subsidiary of Bohai Capital Holding Co. Ltd., whose controlling shareholder is HNA Group, the agency said.

The stand-alone credit profile on Bohai is BB and the stand-alone credit profile on HNA Group is B+.

Avolon is a wholly owned subsidiary of Bohai, which is part of the HNA Group, a Chinese conglomerate and Bohai's largest stockholder, S&P explained.

However, Avolon operates as a stand-alone subsidiary of Bohai and Bohai operates as a stand-alone subsidiary of HNA, although both are consolidated under the HNA Group, the agency noted.

The group benefits from the company's scale and the diversification of its operations, S&P said, but its financial policy is considered aggressive in terms of its acquisition strategy and its high debt leverage.

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