TEXT-Fitch rates Aviation Capital's senior unsecured debt 'BBB-'

(The following statement was released by the rating agency)

Oct 8 - Fitch Ratings has assigned a rating of 'BBB-' to Aviation CapitalGroup Corp.'s (ACG) $150 million Singapore Dollar senior unsecured debt issuanceunder its multicurrency medium-term note programme. The long-term Issuer DefaultRating (IDR) of ACG is not impacted, since overall capitalization and leveragesubsequent this debt issuance were already incorporated in Fitch's rating reviewof ACG on Sept. 12, 2012.

Ratings assigned to ACG reflect consistent operating performance, an attractiveaircraft portfolio, a diverse funding profile, appropriate leverage levels andthe relationship between ACG and its 100% owner, Pacific LifeCorp. (PLC, IDR'A-').

ACG's credit profile has benefited from its ownership and demonstrated financialsupport provided by PLC and its main insurance operating entity, Pacific LifeInsurance Company (PLIC, IDR 'A'), as reflected by the one notch uplift fromACG's stand-alone credit profile of 'BB+'. However, Fitch views future supportas uncertain, particularly in a stress scenario.

RATING DRIVERS AND SENSITIVITIESFitch believes positive rating momentum is currently limited based on ACG'scurrent capitalization on a stand-alone basis. In addition, further uplift inACG's current ratings over the near term is not envisioned unless balance sheetleverage is further reduced to below 3.5x. Conversely, negative rating actionscould result from an unwillingness or inability of PLC to provide timelysupport. Significant deterioration in financial performance and a materialdecline in operating cash flow resulting from significant weakening of sector oreconomic conditions, or a meaningful increase in balance sheet leverage couldalso generate negative rating momentum.

Fitch assigns the following rating:

Aviation Capital Group Corp.--Senior unsecured debt 'BBB-'.

Additional information is available at '

'. The ratings abovewere solicited by, or on behalf of, the issuer, and therefore, Fitch has beencompensated for the provision of the ratings.

Applicable Criteria and Related Research--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);--'Finance and Leasing Companies Criteria' (Dec. 12, 2011);--'Rating FI Subsidiaries and Holding Companies' (Aug. 10, 2012);--'Fitch Affirms Large Equipment Lessor Ratings Following Peer Review; OutlookStable' (Sept. 12, 2012);--'Aircraft Leasing Sector Review' (July 18, 2012).Applicable Criteria and Related Research:Global Financial Institutions Rating CriteriaFinance and Leasing Companies CriteriaRating FI Subsidiaries and Holding CompaniesAircraft Leasing Sector Review(New York Ratings Team)

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