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 Capital Group Corp.'s (ACG) $150 million Singapore Dollar senior unsecured debt issuance under its multicurrency medium-term note programme. The long-term Issuer Default Rating (IDR) of ACG is not impacted, since overall capitalization and leverage subsequent this debt issuance were already incorporated in Fitch's rating review of ACG on Sept. 12, 2012.

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

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

RATING DRIVERS AND SENSITIVITIES Fitch believes positive rating momentum is currently limited based on ACG's current capitalization on a stand-alone basis. In addition, further uplift in ACG's current ratings over the near term is not envisioned unless balance sheet leverage is further reduced to below 3.5x. Conversely, negative rating actions could result from an unwillingness or inability of PLC to provide timely support. Significant deterioration in financial performance and a material decline in operating cash flow resulting from significant weakening of sector or economic conditions, or a meaningful increase in balance sheet leverage could also generate negative rating momentum.

Fitch assigns the following rating:

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

Additional information is available at '

'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated 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; Outlook Stable' (Sept. 12, 2012); --'Aircraft Leasing Sector Review' (July 18, 2012). Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria Finance and Leasing Companies Criteria Rating FI Subsidiaries and Holding Companies Aircraft Leasing Sector Review (New York Ratings Team)

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