Avolon Holdings Limited (“Avolon”), the international aircraft leasing company, announces the successful pricing of a private offering (the “Offering”) by its wholly owned subsidiary, Avolon Holdings Funding Limited, for a principal aggregate amount of US$2.5 billion.

The Offering comprises US$750 million of 3.625% Senior Notes due 2022 (the “2022 Notes”) with a yield to maturity of 3.650%; US$1 billion of 3.950% Senior Notes due 2024 (the “2024 Notes”) with a yield to maturity of 4.064%; and, US$750 million of 4.375% Senior Notes due 2026 (the “2026 Notes”) with a yield to maturity of 4.454%, (together with the 2022 Notes, 2024 Notes, the “Notes”). The Notes will be fully and unconditionally guaranteed by Avolon, and by certain of its subsidiaries.

The Offering was significantly upsized from an initial launch size of US$1.8 billion, reflecting institutional investors’ demand. The Offering is expected to close on or about 16 April 2019, subject to customary closing conditions. Proceeds from the Offering will be used for general corporate purposes, including the repayment of outstanding legacy secured debt, consistent with a commitment to reduce the level of secured debt in Avolon’s capital structure to 30% of total assets.

Moody’s Investors Service (“Moody’s”) has upgraded Avolon’s corporate family and senior unsecured ratings to investment grade (Baa3). Fitch Ratings (“Fitch”) and S&P Global Ratings (“S&P Global”) have also announced their intention, on successful completion of the Offering, to upgrade Avolon’s issuer and senior unsecured debt ratings to investment grade (both BBB-).

Andy Cronin, Avolon CFO, commented: “Today represents a significant milestone for Avolon and marks the delivery of a key corporate objective for 2019. Our achievement of an investment grade rating, ahead of the expected timeframe, reflects the progress we have made to increase the level of unencumbered assets within the business and our metrics as an industry leader in terms of scale, asset quality and airline customer diversification.

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."