Moody's may upgrade Aviall

Moody's Investors Service said it placed Aviall Inc.'s Ba2 corporate family rating and Ba3 senior unsecured bond/debenture rating on review for possible upgrade following the announcement that The Boeing Co. will purchase Aviall for $1.7 billion plus the assumption of $350 million in existing debt.

The review of Aviall's ratings will focus on the potential credit benefits for Aviall as part of the larger Boeing company, including the potential for and nature of any explicit support for Aviall debt holders from Boeing.

Moody's noted that Aviall's 7 5.8% bonds are non-callable before July 1, 2007 and contain various restrictive provisions as well as a requirement to offer to repurchase the bonds at 101% of face value in the event of a change of control. The agency believes it is possible that some portion of Aviall's debt will be repaid in conjunction with the acquisition.

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