OREANDA-NEWS. S&P Global Ratings today assigned its 'BB' issue-level rating to AerCap Global Aviation Trust's $500 million 6.5% fixed - to floating-rate junior subordinated notes due 2045. AerCap Global Aviation Trust is a wholly owned subsidiary of, and guaranteed by, AerCap Holdings N. V.

Our ratings on Netherlands-based aircraft lessor AerCap Holdings N. V. reflect its position as one of the two largest aircraft lessors and the company's improved credit metrics following its May 14, 2014, acquisition of competitor International Lease Finance Corp. We assess the company's business risk profile as satisfactory and its financial risk profile as significant.

The stable outlook reflects our expectation that AerCap's credit metrics will remain relatively consistent through 2017 as increased earnings and cash flow offset the incremental debt it will take on to fund its new aircraft deliveries. Our ratings on the company also incorporate a moderate level of share repurchases. We anticipate that the company's debt-to-capital ratio will remain in the mid-70% area while its funds from operations (FFO)-to-debt ratio remains around 10% over this period.

Although unlikely, we could lower our ratings on AerCap over the next 18-24 months if we believe the company will undertake a larger-than-expected level of share repurchases or acquire a large debt-financed aircraft portfolio that will cause its debt-to-capital ratio to increase to the high-70% area.

Although also unlikely, we could upgrade AerCap over the next 18-24 months if its debt-to-capital ratio declines to the low-70% area and its FFO-to-debt ratio improves to 12%. This could occur if the company's earnings and cash flow are stronger than we had anticipated, due to increased demand and/or lease rates, or its debt levels are lower than we had expected.