ACG placed on negative watch for performing below expectation: S&P

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Aviation Capital Group's ratings, including its "BBB" corporate credit rating, have been placed on credit watch with negative implications by Standard & Poor's as the lessor's credit metrics have been weaker than expected during the past year.

According to S&P, during that period, "funds from operations to debt has averaged less than 7%", which is weaker than the 10%-12% average on its other rated aircraft lessors - all of which are rated lower than ACG.

"Aviation Capital Group has performed below our expectations over the past year," says S&P, adding it will continue to "assess the company's credit prospects, focusing on expected lease rates, capital spending, and debt."

The ratings agency previously indicated it could lower ACG's ratings if there was evidence that earnings and cash flow were not likely to recover, "resulting in funds from operations to debt remaining in the mid- to high-single-digit percent area."