Avolon has priced a $2.5 billion private placement, earning its first investment grade rating.
The three-tranche offering comprises $750 million 3.625% three-year notes; $1 billion 3.95% five-year notes; and, $750 million 4.375% seven-year notes.
The deal was upsized from an initial launch size of $1.8 billion and is expected to close on 16 April, says Avolon in a statement.
Proceeds will be used for general corporate purposes, including the repayment of secured debt, as the company reduces the level of secured debt to 30% of total assets.
Upon the pricing of the deal, Moody’s Investors Service upgraded Avolon’s corporate family and senior unsecured ratings to investment grade at Baa3. Fitch Ratings and S&P Global Ratings have also announced their intention to upgrade Avolon’s ratings to investment grade.
“Today represents a significant milestone for Avolon and marks the delivery of a key corporate objective for 2019,” says Avolon chief financial officer Andy Cronin. “An investment grade rating will provide us with even greater financial flexibility and access to a deep pool of capital. The strong market demand for this offering reflects confidence in Avolon’s credit profile and the long-term prospects for the business."