The $900m five-year term loan from aircraft lessor International Lease Finance Corporation (ILFC) has been rated Ba3 by Moody’s Investors Service and graded BBB- by Standard & Poor’s.

The loan is being issued by Flying Fortress Inc, a subsidiary of ILFC. With the loan the company is seeking repay outstanding debt.

"We base our 'BBB-' issue rating primarily on our view of ILFC's credit quality and satisfactory collateral coverage, but a lack of a direct security interest in the underlying aircraft," said Standard & Poor's credit analyst Betsy Snyder.

Securing the facility is the stock of Flying Fortress's subsidiaries that will own a portfolio of 62 aircraft (through individual aircraft-owning entities). "Although the lenders will not have a direct security interest in the aircraft or leases, we believe the share pledge would likely put the lenders in a better position in a bankruptcy scenario than general unsecured creditors," Snyder continued.

Bank of America is arranging the financing for the Los Angeles-based company. The deal is expected to close on February 23.

People mentioned in this article

Companies mentioned in this article