Avolon boosts credit facility amid strong banking support

Avolon, a prominent aviation finance company, recently announced the extension and increase of its unsecured revolving credit facility, a significant financial maneuver facilitated by a consortium of 25 banks. This facility's maturity date has been pushed back by two and a half years, now set to mature in October 2028, and has seen an increase of US$1 billion, bringing the total to US$5.8 billion. This extension and upsize in credit signals positive market confidence in Avolon's financial trajectory. Through this strategic move, Avolon has brought its total capital raised to US$12 billion for the year, with a notable portion—75%—coming from unsecured sources, highlighting their growing reliance on unsecured debt. The CFO of Avolon, Ross O'Connor, commented that the backing from their banking partners is indicative of the company’s strong market position and performance. This credit facility enhances Avolon's liquidity, granting them more flexibility in managing their financial obligations and funding strategies. By shifting towards a larger proportion of unsecured debt, Avolon aims to improve its credit ratings, which would be beneficial for future financing opportunities. The ongoing support from the banking sector is crucial as it demonstrates trust in Avolon’s business model and operations, which involves managing and financing a fleet of over 1,137 aircraft for 141 airlines across 62 countries. The aviation industry, post-pandemic, has experienced fluctuations, and Avolon's proactive steps to increase their capital availability is a strategic maneuver to navigate these changes effectively. This shift in capital structure allows Avolon to maintain operational efficiency while positioning itself favorably against competitors in the aviation finance space. The positive financial trajectory, as indicated by O'Connor, suggests that Avolon is well-prepared to handle market challenges ahead, securing the resources necessary for their continued growth and operational success. Additionally, Avolon's commitment to diversifying their risk and managing capital efficiently reinforces their aim to uphold a strong balance sheet as they explore further opportunities in the aviation finance market.