AIRCRAFT leasing company Avolon is tapping the unsecured debt markets to support its growth, and its latest annual report for 2019 shows that unencumbered assets increased by 71% to US$14.9 billion by year end.

Avolon posted a record US$718 million net profit for 2019, and ended the year as the third largest aircraft lessor globally, with US$28.4 billion of total assets.

In its annual report released on February 12 Avolon notes that it undertook a material transition of its funding structure over the course of the year, moving from a majority secured borrower to a majority unsecured borrower through the issuance of US$4.1 billion of unsecured debt through both public and private markets, and the repayment of US$3.7 billion of legacy secured debt.

This brought its secured debt to total assets ratio from 42% at the end of 2018 to 28% at the end of 2019 and supported credit rating upgrades to investment grade from Fitch, Moody’s and S&P.

Avolon has already been highly active on the global markets in the first two months of the year. On January 9 it priced a private offering of US$1.1 billion Senior Unsecured Notes due 2025 and US$650 million Senior Unsecured Notes due 2027.

And on February 6 the company announced the successful re-pricing of US$850 million of its senior secured US$2.58 billion Term Loan B facility.

Headquartered in Ireland, with offices in the United States, Dubai, Singapore, Hong Kong and Shanghai, Avolon provides aircraft leasing and lease management services.

Avolon is 70% owned by an indirect subsidiary of Shenzhen Stock Exchange listed Bohai Leasing Co, and 30% by ORIX Aviation Systems, a subsidiary of ORIX Corporation which is listed on the Tokyo and New York Stock Exchanges.