S&P upgrades Avolon notes

S&P said it raised the ratings on Avolon Holdings Funding Ltd.'s and Park Aerospace Holdings Ltd.'s outstanding senior unsecured notes to BB+ from BB and revised the recovery ratings on the notes to 4 from 5.

The 4 recovery rating indicates 30% to 50% expected default recovery.

The upgrade follows the company's recent paydown of its outstanding secured debt with cash on hand, S&P said, along with the use of proceeds from asset sales and an unsecured debt issuance.

This has improved the recovery prospects for the unsecured lenders, the agency said.

The notes are guaranteed by the companies' parent, Avolon Holdings Ltd., which has a BB+ issuer credit rating.

The ratings reflect Avolon's position as the third-largest aircraft lessor, S&P explained.

The ratings also consider ORIX Corp.'s acquisition of a 30% stake in Avolon for $2.2 billion in November 2018, the agency added.

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