Moody's ups Dubai Aerospace

Moody's Investors Service said it upgraded the corporate family rating of Dubai Aerospace Enterprise (DAE) Ltd. to Baa3 from Ba1, the senior unsecured rating of subsidiary DAE Funding LLC to Baa3 from Ba2 and the issuer rating of AWAS Aviation Capital DAC to Baa3 from Ba2. Moody's will subsequently withdraw DAE's Baa3 corporate family rating as this rating is Moody's anchor rating for non-investment grade issuers. The upgrades conclude the review for upgrade started on Nov. 8. The outlook for the issuers is stable.

Moody's said it upgraded DAE's ratings to reflect the company's improving funding structure and liquidity, lower leverage and further progress obtaining repayment of a large loan to its shareholder, the Investment Corporation of Dubai, an investing arm of the government of Dubai.

DAE increased its funding diversity by issuing a higher proportion of unsecured debt and reducing encumbered assets, which strengthens the company's ability to efficiently finance and manage the composition of its fleet of commercial aircraft. DAE's ratio of secured debt to tangible assets declined to 27% at Sept. 30 from 35% at Dec. 31, 2018, in line with investment-grade rated peers.

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