Moody's ups DAE Aviation

Moody's Investors Service said it upgraded DAE Aviation Holdings, Inc.'s corporate family rating to Caa1 from Caa2, its probability of default rating to Caa1 from Caa2, its secured bank credit facility ratings to B2 from B3 and its senior rating to Caa2 from Caa3.

Moody's changed the rating outlook to stable from negative.

The upgrade is heavily influenced by DAE's successful amendment to its bank credit facility, which substantially reduces the near term potential that a financial covenant breach could result in a default event, the agency said.

The upgrade also reflects the belief that improving market conditions should enable DAE to generate modest earnings growth that will facilitate organic deleveraging despite the potential that cash flow may remain consumptive, Moody's said.

The outlook change signals that Moody's does not expect negative rating movements in the near term as the amendment provides the company with sufficient liquidity for the next 12 months, the agency said.

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