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Moody's assigns 1st-time ratings to China's AVIC International Leasing

Moody's assigned Baa1/Prime-2 foreign currency and local currency issuer ratings to China's AVIC International Leasing Co. Ltd., with a stable outlook.

The rating agency said Oct. 11 AVIC International Leasing's Baa1 long-term issuer rating incorporates its standalone assessment of "ba3," as well as a five-notch uplift based on the agency's assumption of a very high level of support from its parent company, AVIC Capital Co.Ltd., if needed.

The company's stand-alone assessment reflects its franchise in China's leasing industry and its improved liquidity position and asset quality but is constrained by the pressure on its capital driven by rapid business growth and its high asset quality risk associated with its equipment leasing business.

As an indirect subsidiary of Aviation Industry Co. Ltd. of China, the sole domestic supplier of aviation products for the Air Force of the People's Liberation Army in China, AVIC International Leasing has a competitive advantage in leasing aviation products, such as aircraft and aviation equipment.