S&P Global Ratings revised Air Lease Corp.'s outlook to negative from stable and affirmed its BBB issuer credit rating.

The rating agency believes that this year Air Lease's revenues will be under pressure due to the impact of the coronavirus pandemic on aircraft leasing companies.

S&P Global Ratings has a base-case scenario for Air Lease with a profit less than half of the $587 million earned in 2019, with EBIT interest coverage falling to the mid-1x area, from 2.3x in 2019, and funds from operations to debt falling to around 7% to 8%, from 10.5% in 2019.

The rating agency added that it foresees higher possibilities of airline bankruptcies and lower aircraft lease rates. Moreover, S&P Global Ratings expects that declining revenues will likely weaken Air Lease's credit ratios, but added that they should recover in 2021.

S&P Global Ratings is maintaining its strong liquidity assessment for Air Lease given that it will be able to reduce its capital spending substantially. The rating agency also expects Air Lease to continue to maintain substantial headroom under its revolving credit facility's maximum debt to equity ratio and minimum consolidated equity over the next year.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.