S&P Raises CDB Aviation Lease Finance Designated Activity's Standalone Credit Profile

MT Newswires Live05-14

S&P Global Ratings upgraded CDB Aviation Lease Finance Designated Activity's standalone credit profile to "bb-" from "b+" while maintaining its A long-term issuer credit rating, according to a recent release.

The company sees improved debt maturity profile and EBIT interest coverage due to long-term debt issuances, a capital injection, and increased rental yields, S&P said.

The outlook is stable for the next two years, reflecting that on parent China Development Bank Financial Leasing (HKG:1606) and S&P's view that the subsidiary will continue to be a core subsidiary of the parent.

The affirmed rating considers the parent's support, especially for the aircraft lessor's business development and funding needs, as reflected in a $860 million capital injection.

S&P does not expect further injections in the next 12 to 24 months, due to the lessor's own cash flow and further US dollar financing that would be enough for future capacity additions.

The rating agency expects long-term aircraft demand to remain strong despite a temporary slowdown due to the Middle East impact.

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