AVIC International Leasing Issuer Summary

Report date: 2026-05-20
Issuer: AVIC International Leasing Co., Ltd. / 中航国际融资租赁有限公司
Ticker / watchlist code: AVIILC
Country bucket: China
Sector: Finance leasing / aviation, equipment, vessel and public utility leasing
Primary credit focus: expected support from AVIC Group, finance-lease asset quality, aviation / equipment / vessel / public-utility exposure, refinancing of short-term debt and offshore bonds, restricted assets, structural subordination of unsecured bonds, domestic versus international rating gap

1. Business Snapshot and Recent Developments

AVIC International Leasing Co., Ltd. (AVICIL, 中航租赁) is a finance leasing company under Aviation Industry Corporation of China, Ltd. (AVIC Group). For credit analysis purposes, it should not be treated as an airline or as a pure global aircraft operating lessor. It is a finance leasing company rooted in the aviation industry, and its credit profile needs to be assessed by looking together at its leasing assets in aircraft, equipment, vessels and public utilities, and the funding structure that supports those assets, including bank borrowings, bonds, offshore bonds and SPVs. The value of hard assets such as aircraft and vessels, the recoverability of equipment and public-utility credit exposures, and the expected support from AVIC Group all shape the company’s credit strength at the same time.

The company’s Chinese name is 中航国际融资租赁有限公司, and its short name is 中航租赁. Its former name was 中航国际租赁有限公司. According to the 2025 company bond annual report, its business scope includes finance leasing, leasing of self-owned equipment, residual-value disposal and maintenance of leased assets, import and export, domestic trade, industrial investment, medical-equipment-related business, and related consulting. Its main businesses are finance leasing and operating leasing of civil aircraft, electromechanical equipment and transportation equipment. Transaction forms are broadly divided into direct leasing, sale-and-leaseback and operating leasing.

The control structure is the first issue in reading this issuer. According to the 2025 company bond annual report, the controlling shareholder is AVIC Industry-Finance Holdings Co., Ltd. (中航工业产融控股股份有限公司), with an 85.16% shareholding at end-2025. The ultimate beneficial controller is the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), and AVIC Group has an important position as a state-owned aviation, defence and civil aviation industrial group. Lianhe Ratings regards AVICIL as the only leasing business platform under AVIC Group and assesses it as strategically important within the group. This expected support is significant for the company’s ratings and funding access.

However, expected support is not the same as a legal guarantee. AVICIL’s debt should not be treated as debt unconditionally guaranteed by SASAC, the PRC sovereign, AVIC Group or AVIC Industry-Finance. The support that can be confirmed consists of the equity relationship, strategic positioning, intra-group customer and funding support, rating agencies’ assessment of external support, and support expectations in the onshore and offshore markets. This differs from legal wording that guarantees principal and interest payments on specific bonds. Bond investors need to distinguish between issuer credit and the issuing entity, guarantee, collateral, governing law, cross-default, change of control and other terms of each specific security.

An important change in 2025–2026 is that some friction has become visible in the support channel. According to the 2025 company bond annual report, AVIC Industry-Finance pledged its directly held 49.07% stake in AVICIL to AVIC Group, and the shares are currently frozen. In addition, AVIC Investment Holdings Co., Ltd. (中航投资控股有限公司), in which AVIC Industry-Finance holds 73.56%, also pledged its 49.065% AVICIL stake to AVIC Group on 2025-06-25. This has, in one respect, made the link with the ultimate parent AVIC Group more direct. At the same time, stress or restructuring factors at the intermediate parent, AVIC Industry-Finance, could affect market sentiment. Fitch’s removal of the Rating Watch Negative in 2025 also reflected its assessment of whether AVIC Group’s willingness to support AVICIL would be maintained despite this intermediate-parent issue.

The 2025 results showed a smaller business scale and weaker profitability. Total operating revenue was RMB8.316bn, down from RMB10.174bn in 2024. Of this, finance-lease and operating-lease income was RMB7.408bn, representing 89.08% of operating revenue. Profit before tax was RMB1.816bn, and net profit was RMB1.554bn, slightly down from RMB1.687bn in 2024. Total assets declined from RMB146.646bn at end-2024 to RMB129.148bn at end-2025, while liabilities also fell from RMB120.208bn to RMB104.778bn. This was not a simple deterioration, but rather a simultaneous contraction of leasing assets and debt. However, the decline in profitability during this scale reduction, and the fall in equity from RMB26.437bn to RMB24.369bn, are important when assessing future loss-absorption capacity and growth headroom.

At the same time, cash flow appears strong at first glance. Consolidated operating cash flow in 2025 was RMB21.500bn, exceeding RMB18.194bn in 2024. Cash and cash equivalents at period-end also increased to RMB9.132bn. For a finance leasing company, an increase in operating cash flow may result from lease-asset collections or restrained new disbursements, and does not necessarily mean a sustainable improvement in earnings power. Therefore, while cash flow is a positive liquidity factor, it is necessary to keep checking which combination of business contraction, lower disbursements, debt repayment and asset collection is driving it.

The information cut-off date for this report is 2026-05-20. The main financial information is based on the 2025 company bond annual report, which was confirmed and obtained through the notice listing on 2026-04-30, the 2024 company bond annual report dated 2025-04-29, and Lianhe Ratings’ follow-up rating report dated 2025-06-27. The Sina bond notice list also showed, as of 2026-04-30, the 2026 first-quarter consolidated and parent-company financial statements, the 2025 annual report and the 2025 audit report. However, in this work, some direct downloads resulted in short error pages, and the full detailed text could not be fully captured. Therefore, the 2026 first-quarter information is treated as a “next tracking item that has been confirmed in the public notice list but not incorporated into the body of this report.”

The latest credit snapshot is as follows.

2. Industry Position and Franchise Strength

China’s finance leasing industry is deeply linked to capital expenditure, aircraft, vessel and infrastructure investment, and the funding needs of local SOEs and industrial companies. Leasing companies do not take deposits like banks, but they hold long-term lease receivables and leased assets, and fund them through bank borrowings, bonds, asset securitisation and offshore bonds. Issuer credit is therefore determined by the combination of credit risk in leasing assets, hard-asset values, funding-market access and parent-company / government linkage. AVICIL is distinctive within this universe as a central-SOE finance leasing company with an aviation-industry background.

AVICIL was one of the early domestically funded finance leasing companies approved in China and identifies itself as a specialised leasing company invested by a central enterprise and backed by the aviation industry. Since 2007, with support from AVIC Group and its shareholders, the company has expanded its registered capital and business scale. Lianhe Ratings put the company’s interest-earning asset balance at RMB133.805bn as of end-March 2025, including RMB49.395bn in aviation leasing and RMB52.808bn in equipment business, and assessed it as competitive in aviation and equipment. This indicates that the company is not merely an aircraft leasing company, but an industrial-finance platform covering large-scale equipment as well.

The value of the aviation franchise lies in the relationship with AVIC Group. Lianhe explains that AVICIL performs a market-development function for domestically produced civil aircraft and has supported the domestic aviation sector through finance leasing of aircraft such as the C909, MA60, Y-12, Xiaoying 500 and AC313. This means that AVICIL has not only revenue opportunities as a commercial aircraft leasing company, but also a policy and industrial role in complementing AVIC Group’s aviation-industry chain. Rather than being a finance company that purely seeks high-yield transactions, it is an issuer with both a financial function supporting the group’s aviation industrial base and a market-oriented leasing business.

However, it is insufficient to evaluate the whole company solely on the aviation franchise. Based on Lianhe’s end-March 2025 data, the composition of interest-earning assets was 36.92% aviation, 39.47% equipment, 15.82% vessels and 7.80% public utilities. Equipment is the largest segment, and although public utilities are shrinking, they carry asset-quality issues. Equipment was also the largest sector in terms of new disbursements in 2024, and the company’s revenue base extends beyond aviation into industrial equipment leasing such as green energy, steel and machinery. This diversification adds depth to the franchise, but the relatively good quality of aviation assets alone cannot hide credit-deterioration risk in equipment and public utilities.

The customer base is broad, but there is also concentration. Company materials state that AVICIL has more than 500 customers across over 30 provinces and municipalities, and that it operates in new energy, infrastructure, high-end manufacturing, energy conservation and environmental protection, modern agriculture, healthcare and power. At the same time, Lianhe’s end-March 2025 data show that the total finance-lease business balance for the largest lessee, Air China Limited, was RMB8.269bn, equivalent to 33.52% of net assets and above the 30% regulatory limit for single-customer concentration. Single largest group concentration was also high at 45.57%, although within the 50% limit. Having a strong aviation-related customer supports credit quality, but it is necessary to keep monitoring the credit quality of large customers, equipment utilisation and the soundness of group-related transactions.

At the industry level, the earnings environment for finance leasing companies is not easy. Lower interest rates and intensified competition in China put pressure on existing asset yields and spreads on new disbursements. Lianhe also cited the reduction in leasing interest income due to the smaller scale of leasing business and lower lease rates as reasons for the revenue decline in 2024. For 1Q 2025, operating revenue was also said to have declined year on year due to the combined effect of a smaller business scale and falling interest rates. The company’s strength has therefore shifted away from “rapid growth” and toward “whether it can maintain asset quality and funding while adjusting scale against the backdrop of expected support.”

In assessing the company’s franchise, it is necessary to look simultaneously at its central-SOE status and the risks of the finance leasing business. Its position within AVIC Group supports funding, customer access and support assumptions in ratings. However, leasing assets are ultimately repaid through lessees’ cash flow, collateral value and the disposal value of aircraft, vessels and equipment. Even if support expectations are strong, risks for unsecured bond investors increase if asset quality deteriorates, restricted assets increase, short-term funding dependence rises and offshore-bond refinancing stress overlaps.

3. Segment Assessment

AVICIL’s revenue depends heavily on finance leasing and operating leasing. In 2025, finance-lease and operating-lease income was RMB7.408bn, accounting for 89.08% of operating revenue. Trading and other income was RMB0.888bn, while property leasing and services were RMB0.020bn, neither of which is the main focus for credit analysis. Therefore, analysis should look not only at the revenue mix in the income statement, but also at the industries in which leasing assets are deployed, how far those assets have become non-performing, and which assets have been pledged as collateral.

Lianhe’s end-March 2025 data are useful for organising the segment-by-segment analysis.

Aviation leasing is the core of the company’s brand and the area where the relationship with AVIC Group is most visible. According to Lianhe, aviation leasing assets were RMB49.395bn at end-March 2025, with a fleet of 367 aircraft. The aviation-sector non-performing asset ratio was stated at 0%, indicating good asset quality. The direct-lease ratio remains high, but the company has also been increasing the share of operating-lease assets. Aircraft leasing involves long asset lives and lease tenors, and lease payments are relatively visible. At the same time, it entails airline credit risk, aircraft redeployment risk, market acceptance of domestically produced aircraft, aircraft-value risk and potential mismatches with foreign-currency funding.

The equipment business is the other main credit driver. At end-March 2025, equipment business assets were RMB52.808bn, accounting for 39.47% of the total, making it the largest segment and larger than aviation. Lianhe states that the main customers in the equipment business are SOEs, listed companies and high-quality private enterprises, and that the top industries in the equipment business asset balance at end-2024 were green energy at 27.45%, steel at 10.21% and machinery equipment at 10.04%. The equipment business is a major source of the company’s profit, but the non-performing ratio was 1.70% at end-March 2025, clearly higher than aviation and vessels. Industry cycles in green energy and steel, equipment prices and lessee cash flow need to be monitored.

Vessel leasing is smaller than aviation and equipment, but with an asset balance of RMB21.173bn and a 15.82% share at end-March 2025, it is not negligible. Lianhe put the vessel-sector non-performing asset ratio at 0% and viewed asset quality as good. However, vessel leasing depends on vessel prices, freight rates, vessel type, charter contracts and the disposability of vessel collateral. In a strong shipping market, collateral values and customer cash flow are supportive, but asset values can fall sharply when the cycle turns. The company’s specialist vessel team and relationships with shipyards and shipping companies are strengths, but investors should not treat vessel leasing as the same risk as aviation assets.

Public-utility leasing is important for asset quality despite its shrinking balance. Lianhe explains that the company is proactively adjusting the public-utility segment and that there were no new public-utility projects or deliveries in 1Q 2025. The asset balance declined by 19.53% from RMB12.961bn at end-2024 to RMB10.430bn at end-March 2025, while the NPL ratio rose to 6.04%, which is already considered high. This reflects not only a denominator effect from the shrinking balance, but also collection risk among local public-utility and infrastructure-related lessees. The deterioration in this segment should not be disregarded just because the overall NPL ratio is low.

Overall asset quality still appears manageable on the surface. Lianhe’s data show that the non-performing ratio of leasing assets was 1.31% in 2022, 1.39% in 2023, 1.39% in 2024 and 1.41% at end-March 2025, representing only a slight increase. Allowance coverage rose over the same period from 279.39% to 402.90%, indicating thick provision coverage. However, details of special-mention assets and restructured receivables are not sufficiently visible, and risk is concentrated in public utilities and equipment. Therefore, “the overall NPL ratio is low” is a strength, but it is not enough to conclude that “asset-quality risk is low.”

The 2025 segment revenue table also shows business contraction. Revenue from finance leasing and operating leasing declined from RMB9.193bn in 2024 to RMB7.408bn in 2025, while the gross margin also fell from 31.34% to 28.18%. This reflects lower yields in the finance leasing industry, contraction in existing assets and competitive pressure. Future credit strength depends on whether the company can reduce low-return and high-risk assets while maintaining sufficient yields and recoverability in aviation, equipment and vessels.

4. Financial Profile and Analysis

AVICIL’s financial profile clearly moved into contraction mode in 2025. Total assets declined for two consecutive years, from RMB163.592bn at end-2023 to RMB146.646bn at end-2024 and RMB129.148bn at end-2025. Long-term receivables, which correspond to long-term lease receivables, fell from RMB82.324bn at end-2023 to RMB63.347bn at end-2025, while non-current assets due within one year also declined from RMB34.860bn to RMB24.742bn. This indicates collection and contraction of leasing assets. Fixed assets, meanwhile, stood at RMB18.735bn, reflecting the presence of operating-lease assets such as aircraft and vessels.

Profitability is moderate relative to scale. Net profit of RMB1.554bn in 2025 was positive and shows that the company maintained earnings even during asset contraction. However, the profit buffer is limited relative to total assets of RMB129.148bn and equity of RMB24.369bn. Lianhe’s data also show return on total assets of 1.22% in 2022, 1.18% in 2023 and 1.09% in 2024, with 1Q 2025 at 0.22% before annualisation. This is not extremely low for a finance leasing company, but it is not strong enough to independently support high leverage.

The decline in equity requires attention. Other equity instruments at end-2025, effectively perpetual bonds and similar instruments, had fallen to RMB0.980bn. The balance was RMB3.240bn at end-2024 and RMB5.240bn at end-2023, so repayment or reduction of equity-like instruments contributed to the fall in equity. Whether perpetual bonds are treated as capital or debt depends on the analytical methodology, but in either case, the reduction in perpetual bonds lowers accounting equity and may worsen leverage metrics. Lianhe also indicated in its 2025 forecast that year-end leverage could rise due to partial maturities of perpetual bonds.

Debt reduction is a clear positive. Consolidated interest-bearing debt at end-2025 was RMB96.589bn, down 11.03% from RMB108.565bn at end-2024. Interest-bearing debt at the issuer level also declined by 14.97%, from RMB59.459bn to RMB50.560bn. The reduction of debt in line with smaller business scale indicates an intention to manage leverage. At the same time, equity also declined, so debt reduction alone does not amount to a major improvement in credit strength. Lianhe’s leverage multiple was 5.21x in 2024 and 5.48x at end-March 2025, remaining high.

Improved operating cash flow supports liquidity. In 2025, operating cash flow was RMB21.500bn, investing cash flow was an inflow of RMB0.873bn and financing cash flow was an outflow of RMB19.657bn. This is close to a structure in which debt repayment and reduced funding were covered by operating collections and asset sales / investment recoveries. For leasing companies, operating cash flow can look strong when new disbursements are restrained. Therefore, this figure is evidence for assessing refinancing capacity, but should not be treated as evidence of growth capacity.

Asset liquidity is limited. The bulk of assets consists of long-term receivables, non-current assets due within one year and fixed assets, rather than cash or short-term financial assets. Lease receivables generate stable cash if collected according to contract, but they are not assets that can be immediately converted into cash through collateral disposal or early sale. Aircraft and vessels have market value, but sales take time and are cycle-dependent. For equipment and public-utility leases, lessee repayment ability and the local fiscal and industrial environment are more important than collateral value.

Overall, the financial profile is one of “low but positive earnings, asset and debt contraction, and liquidity secured through operating collections.” Credit supports include debt reduction, higher cash, apparently stable asset quality and expected support. Constraints include falling revenue and profit, lower equity, high leverage, large short-term debt and substantial restricted assets. In 2026 monitoring, it will be necessary to judge whether asset contraction is an orderly risk-reduction process or a shrinkage that erodes the earnings base.

5. Structural Considerations for Bondholders

AVICIL bond investors need to assess not only the company as a consolidated finance leasing group, but also which legal entity issues the debt and which assets each debt claim can access. Consolidated interest-bearing debt was RMB96.589bn at end-2025, while issuer-level interest-bearing debt was RMB50.560bn. The consolidation includes SPVs related to aircraft and vessels, and the assets and borrowings held by these SPVs may involve collateral, guarantees and restrictions on fund transfers. It would be risky to treat the size of the consolidated balance sheet as directly available assets for unsecured bond investors.

The end-2025 debt structure was centred on bank borrowings. Of the RMB96.589bn of consolidated interest-bearing debt, bank borrowings were RMB60.904bn, corporate credit bonds were RMB20.204bn and other interest-bearing debt was RMB15.481bn. At the issuer level, bank borrowings were RMB28.346bn, corporate credit bonds were RMB20.204bn and other debt was RMB2.010bn. The large bank-borrowing base supports the company through relationships with domestic financial institutions and refinancing channels. At the same time, if secured borrowings and asset encumbrance increase, the effective recovery headroom for unsecured creditors declines.

Restricted assets are substantial. Restricted assets at end-2025 were RMB45.383bn, consisting mainly of restricted cash of RMB0.662bn, restricted finance-lease receivables of RMB35.500bn and restricted fixed assets of RMB9.221bn. The restricted ratio was 38.05% for finance-lease receivables and 49.22% for fixed assets. The company pledged finance-lease receivables, bank deposits and shares in 47 SPVs as collateral for long-term borrowings and other debt. It also used as mortgage collateral 113 aircraft, 21 vessels and two sets of equipment that had already been leased out under finance leases. In addition, 19 aircraft and 16 vessels were also mortgaged as collateral for long-term borrowings.

The large volume of restricted assets has two implications. First, for banks and secured creditors, it indicates that asset-backed funding is in place and supports liquidity. Second, for unsecured creditors, it means that high-quality assets freely available in stress may be limited. In particular, if the better-quality parts of aircraft, vessels and lease receivables have been pledged as collateral, recovery for unsecured bond investors depends more on residual assets, group support and the issuer’s going-concern value.

Related-party guarantees should also be interpreted carefully. The 2025 company bond annual report states that guarantees provided by the issuer to related parties stood at RMB33.749bn. These were guarantees for subordinate SPV companies, with zero guarantees for other related parties. The external guarantee balance was zero at both the beginning and end of the period. Guarantees for SPVs accompany the asset-holding and borrowing structure of aircraft and vessel leasing, and do not necessarily mean an expansion of contingent liabilities to third parties. At the same time, because SPV debt can come back to the parent through issuer guarantees, it is necessary to confirm debt priority and the relationship with collateral assets even within the consolidation.

Offshore bonds are also important. Consolidated offshore bonds outstanding at end-2025 were RMB12.473bn in RMB-equivalent terms. Fitch’s November 2025 release states that Soar Wise Limited and Soar Wind Ltd. are indirect wholly owned subsidiaries of AVICIL and Cayman-incorporated SPVs that issue MTN programme notes and senior unsecured bonds. In this report, the full terms of individual offshore bonds, including guarantees, keepwells, collateral, governing law, covenants, change of control and cross-default, have not been reviewed. Offshore bond investors therefore need to distinguish between AVICIL parent debt, SPV-issued debt, guaranteed debt and debt supported only by a keepwell.

Material litigation is not the central credit factor, but it is a monitoring item. As of end-2025, the annual report disclosed a material pending lawsuit in which COFCO Trust filed a financial loan contract dispute against AVIC Industry-Finance, AVICIL and others. The disputed amount is approximately RMB1.002bn, and the case was accepted by the Shanghai Financial Court on 2025-09-19, with the first instance pending. The amount is not negligible relative to equity, but it is not large enough on its own to determine the company’s overall credit profile. The important point is to monitor whether financial-contract disputes involving the parent company and related parties affect the support channel or market perception.

The structural conclusion is clear. AVICIL’s bonds are supported by expected AVIC Group support and domestic and offshore market access, but a substantial portion of assets is collateralised or restricted, and the structure is complex, involving SPVs and offshore issuers. Therefore, investors should not treat all bonds as identical merely because of the issuer rating. They should check the issuer of each bond, the existence of guarantees, collateral, keepwells and covenants, and changes in restricted assets.

6. Capital Structure, Liquidity and Funding

AVICIL’s funding structure combines bank borrowings, corporate bonds, non-financial enterprise debt financing instruments, offshore bonds, asset-backed funding and SPV borrowings. At end-2025, consolidated interest-bearing debt was RMB96.589bn, of which RMB36.123bn was due within one year and RMB60.466bn was due after more than one year. At the issuer level, interest-bearing debt was RMB50.560bn, of which RMB28.179bn was due within one year and RMB22.382bn was due after more than one year. Short-term debt is large, and the company is not structured to repay it entirely with cash.

As of end-2025, there were no overdue interest-bearing debts or corporate credit bonds exceeding RMB10mn. This is a minimum but important support. The 2025 financing cash flow also shows that the company received RMB67.101bn of borrowings while repaying RMB78.122bn of debt, reducing debt on a net basis. Dividend distributions and interest payments were RMB6.058bn. The funding structure is typical of a finance company that rolls collections, borrowings and repayments on a large scale, and cannot be assessed only by the static cash balance.

For liquidity analysis, it is insufficient simply to compare cash of RMB9.8bn with interest-bearing debt due within one year of RMB36.1bn. A leasing company’s actual repayment capacity depends on unused bank facilities, continued bank-loan rollovers, bond-market access, asset-backed funding, scheduled lease-receivable collections, the saleability of aircraft and vessels, and expected funding support from the parent company and group. This report has not been able to fully confirm unused bank facilities, the full maturity ladder, the currency and hedging of foreign-currency bonds, or the interest-rate repricing profile. These are the highest-priority items to add in future updates.

Lianhe views overall liquidity risk as controllable, considering the company’s external financing channels and shareholder funding support, even though there was a certain maturity mismatch between lease assets and debt as of end-March 2025. At the same time, it points out that the proportion of debt due within one year is high and that the finance leasing business model combines a certain amount of short-term funding. Therefore, the centre of the liquidity analysis is not “repayment with cash,” but rather “whether refinancing capacity and collection cash flow are maintained.”

The existence of offshore bonds makes the credit profile more complex. Offshore bonds of RMB12.473bn equivalent introduce issues of foreign-currency funding, offshore market access and hedging into a company whose assets are mainly RMB-denominated. Fitch’s removal of the RWN in November 2025 indicates that offshore investors’ support expectations and funding access have not been completely lost. However, offshore bond spreads, foreign-currency liquidity and market reactions to parent-related events may move more sensitively than domestic AAA bonds.

In the capital structure, the treatment of perpetual bonds and perpetual notes is important. Other equity instruments under accounting treatment declined to RMB0.980bn at end-2025. Perpetual bonds may support domestic ratings and accounting equity, but from an investor perspective, it is necessary to confirm interest deferral, suspension, step-ups, call options and ranking relative to senior bonds. The decline in perpetual bonds can reduce uncertainty around hybrid capital, but it may also be negative for equity ratios and leverage metrics.

The most important funding issue is whether the relationship with AVIC Group continues to support market access. Lianhe assesses that the company can receive substantial support from shareholders in business channels and funding, and reflects one notch of external support. Fitch also bases AVICIL’s IDR on shareholder support. However, neither means a legal guarantee for individual debts. Expected support is strong, but in market stress, the timing, form, target debt, regulatory approvals and parent-company funding capacity become important.

7. Rating Agency View

In its follow-up rating dated 2025-06-27, Lianhe Ratings maintained AVICIL’s long-term issuer credit rating at AAA with a stable outlook and also rated the relevant onshore bonds AAA. In Lianhe’s view, the company is the only finance leasing subsidiary under AVIC Group and has an important position within the group. Although business scale had contracted by end-2024, it remained large, and the company retained strong business competitiveness. Revenue and profit declined, but profitability remained relatively strong; capital strength was strong as of end-March 2025; asset quality was good; and financial leverage was high.

In Lianhe’s scoring, AVICIL’s standalone credit profile is aa+, external support is shareholder support +1, and the final rating is AAA. This “+1” is important. The domestic AAA rating reflects not only the company’s standalone earnings power and capital, but also the relationship with AVIC Group, its importance within the central-SOE group, and expectations of funding and business support. Therefore, the domestic AAA should be read not as “a low-risk independent finance company,” but as “a domestic rating incorporating support expectations.”

The strengths cited by Lianhe are clear. First, the shareholder has very strong overall strength and provides substantial support to the company. Second, the company has strong business competitiveness, with finance-lease receivables with a carrying value of RMB101.698bn at end-March 2025, ranking among the larger players in the industry. Third, the company has strong capital strength and relatively diversified financing channels. On the other hand, Lianhe’s areas of focus include asset-quality pressure from rising external credit risk, the large debt scale and high leverage, high business and customer concentration, and the fact that single-customer concentration exceeds the regulatory standard.

For Fitch, the 2025-11-13 release carried by Reuters / TradingView confirmed AVICIL’s Long-Term IDR at BBB+, Short-Term IDR at F1 and Shareholder Support Rating at bbb+, removed the Rating Watch Negative and assigned a Stable outlook. Fitch viewed AVIC Group’s willingness to support AVICIL as being maintained despite the events at AVIC Industry-Finance. Specifically, it cited factors such as stronger liquidity and funding oversight by the group-wide financial platform, the establishment of units within AVICIL to support AVIC’s aviation manufacturing business and China’s aviation sector, domestic funding access and normalisation of offshore bond yields.

Fitch’s rating uses a different scale from the domestic AAA rating. The gap between BBB+ and AAA should not be discussed as a simple notch differential. Domestic ratings strongly reflect issuer comparison within the Chinese onshore market and support expectations, while international ratings more conservatively incorporate the sovereign, parent support, legal structure and offshore bond investor perspectives. For investors, the important point is not to assume that “because the domestic rating is AAA, offshore bonds carry the same risk,” and also not to simplistically conclude that “because the rating is BBB+, domestic bonds are weak.” Both assess the same support expectation, but through different markets and scales.

For Moody’s, a reference to Baa1 / negative was identified in a secondary Chinese news feed, but this work did not directly obtain an official Moody’s release. Therefore, it is not used in the main rating analysis in this report. Future updates should confirm Moody’s official issuer rating, guarantees and ratings for offshore SPV issuers such as Soar Wind / Soar Wise, and the history of rating-outlook changes.

Overall, rating agencies view AVICIL as an issuer that maintains a high domestic rating and an international investment-grade rating because of expected support. Its credit cannot be explained solely by standalone profitability, leverage and asset quality. The largest rating risk is any weakening in the relationship with, or support willingness from, AVIC Group, or a change in the credit perception of the parent or ultimate parent.

8. Credit Positioning

AVICIL’s credit positioning is that of “a large finance leasing company supported by expected AVIC Group support,” not “a standalone non-bank financial institution with extremely low risk.” Its strengths are business scale, ties to the aviation industry, a portfolio covering equipment, vessels and public utilities, domestic AAA rating and international investment-grade rating. However, many of these strengths depend on group linkage, funding access and expected support rather than self-contained earnings power.

Compared with a global aircraft operating lessor such as BOC Aviation, AVICIL is closer to domestic Chinese industrial finance. In addition to aviation leasing, equipment, vessels and public utilities are substantial, and domestic lessees, local and industrial cycles, lease-receivable collections, bank borrowings, the onshore bond market and expected AVIC support are important. Aircraft values alone cannot explain the risk.

Misreadings investors should avoid are treating all debt as effectively government-guaranteed because of SASAC control and domestic AAA, or assuming that expected support has already disappeared because of the parent’s delisting and share freezes. At this point, the link with AVIC Group has in some respects become more direct, and Fitch also assessed support willingness as being maintained when it removed the RWN. However, friction in the support channel is a fact. If events such as weakening support expectations, short-term refinancing blockage, rising NPLs in public utilities and equipment, further increases in restricted assets and closure of the offshore bond market overlap, the high leverage and structural subordination would quickly become much more visible.

9. Key Credit Strengths and Constraints

The core strength lies not in high profitability of the business itself, but in the linkage with AVIC Group and the company’s scale as a finance leasing company. In particular, being the only leasing platform within a central-SOE group that owns an aviation industry is a credit support not available to ordinary independent non-bank financial institutions. Lianhe’s external support +1 and Fitch’s support-driven rating clearly indicate this point.

At the same time, the company’s constraints are also clear.

The most important constraint is a scenario in which the quality of support expectations and liquidity are tested at the same time. Even if asset quality deteriorates, a short-term credit event can likely be avoided if AVIC Group and the domestic banking market provide sufficient support. Conversely, if market access weakens due to credit concerns related to the parent, and this coincides with short-term debt or offshore bond maturities, unsecured bond investors’ concerns can intensify easily because asset encumbrance is already substantial.

10. Downside Scenarios and Monitoring Triggers

The downside scenarios can be grouped into six. The first is a decline in support expectations, where AVIC Group no longer treats AVICIL as a core leasing platform or rating agencies lower their support assessment. The second is deterioration in refinancing access, where bank borrowings, the bond market, offshore bonds or asset collections become blocked against consolidated interest-bearing debt due within one year of RMB36.123bn. The third is asset-quality stress starting from the public-utility NPL ratio of 6.04% and equipment NPL ratio of 1.70%, with deterioration in special-mention assets, delinquencies, restructurings and collateral disposals.

The fourth is a further increase in restricted assets from RMB45.383bn, strengthening the structural subordination of unsecured creditors. The fifth is shrinkage of the equity buffer of RMB24.369bn due to a reduction in capital-like instruments such as perpetual bonds or disposal of non-performing assets. The sixth is spillover from parent-related events, including the COFCO Trust dispute, post-delisting arrangements for AVIC Industry-Finance, and pledges and freezes over AVICIL shares, into market sentiment and rating-agency support assessments.

11. Credit View and Monitoring Focus

The current credit level can reasonably be framed as domestic AAA-equivalent market access onshore and a Fitch BBB+-equivalent support-driven credit offshore. The direction is stable for now, but in business terms, revenue and asset scale are shrinking, and the standalone credit profile is somewhat weaker. The likelihood of a sudden change is not high under normal conditions, but it would rise quickly if expected AVIC Group support, short-term refinancing, asset quality or restricted assets deteriorate at the same time.

At the same time, the company should not be treated as low-risk government-guaranteed debt. In 2025, revenue declined, profit declined, assets contracted and equity fell simultaneously. Consolidated interest-bearing debt is large at RMB96.589bn, debt due within one year is RMB36.123bn, and cash alone does not provide sufficient coverage. Restricted assets reached RMB45.383bn, and unsecured creditors should recognise structural subordination. The credit is stable as long as expected support is maintained, but because that support is not a legal guarantee, checks on issuer asset quality, liquidity, collateralisation and individual bond structures are essential.

The delisting of AVIC Industry-Finance and the pledges and freezes over AVICIL shares do not unilaterally worsen the credit profile. In some respects, the link with AVIC Group has become more direct, and Fitch also judged that support willingness would be maintained and removed the RWN. However, these events show that the support channel is not simple and that the market may react sensitively to intermediate-parent events. The most important issue going forward is how AVIC Group positions AVICIL as a group financial function and supports it in terms of funding and capital.

As the base view at the report date, AVICIL is likely to maintain domestic AAA-equivalent market access onshore and a Fitch BBB+-equivalent support-driven credit offshore as long as support expectations are preserved. However, the company’s unsecured bonds are neither pure sovereign proxy debt nor debt of an independent leasing company with ample asset surplus. Credit stability depends on AVIC Group support, domestic bank and bond market access, asset quality, short-term debt rollover and management of restricted assets functioning simultaneously.

In the next update, priority should be given to confirming the 2026 first-quarter financial statements and the full versions of the 2025 annual report and audit report, the 2026 interim report, offshore bond terms, unused bank lines, foreign-currency hedging and Moody’s official rating. In particular, it is necessary to track how far the end-2025 contraction continues into 2026, whether asset-quality pressure is spreading from public utilities and equipment into other segments, and whether additional evidence emerges to confirm expected AVIC Group support.

12. Short Summary & Conclusion

AVIC International Leasing is the only leasing business platform under AVIC Group, and its state-owned control structure traceable to SASAC and its role in the aviation industry support its credit strength. Although it has a strong aircraft-leasing image, the issuer should actually be viewed as a large Chinese finance leasing company covering equipment, vessels and public utilities as well.

In 2025, operating revenue declined to RMB8.316bn and net profit to RMB1.554bn, while consolidated interest-bearing debt was RMB96.589bn and debt due within one year was RMB36.123bn. AVICIL’s bonds are not explicitly government-guaranteed; they are debt of a finance leasing company supported by expected AVIC Group support. Going forward, the key monitoring items are support expectations, short-term refinancing, asset quality in equipment and public utilities, and the trajectory of restricted assets of RMB45.383bn.

13. Sources

• 中航国际融资租赁有限公司, company bond annual report 2025, published 2026-04-30, accessed via Sina bond notice feed 2026-05-20.
  https://gu.sina.cn/bd/hq/notice.php?annid=24490265
• Sina bond notice listing for sh115349, accessed 2026-05-20.
  https://gu.sina.cn/bd/hq/news.php?symbol=sh115349&type=notice
• 中航国际融资租赁有限公司, company bond annual report 2024, published 2025-04-29, accessed 2026-05-20.
  https://static.cninfo.com.cn/finalpage/2025-04-29/1223414721.pdf
• 联合资信评估股份有限公司, 中航国际融资租赁有限公司2025年跟踪评级报告, published 2025-06-27, accessed 2026-05-20.
  https://www.lhratings.com/reports/B0011822-P74661-2024-GZ2025.pdf
• 联合资信评估股份有限公司 project detail page for AVICIL related bonds, accessed 2026-05-20.
  https://www.lhratings.com/announcement/projectDetail.html?pid=1826d453feb
• Fitch Ratings / Reuters via TradingView, Fitch Affirms AVIC International Leasing at 'BBB+'; Resolves Rating Watch; Outlook Stable, dated 2025-11-13, accessed 2026-05-20.
  https://www.tradingview.com/news/reuters.com%2C2025-11-14%3Anewsml_FIT88l5H3%3A0-fitch-affirms-avic-international-leasing-at-bbb-resolves-rating-watch-outlook-stable/

Internal Working Data

• issuer_summary/issuers/avic_international_leasing/data/avic_international_leasing_credit_metrics_20260520.json
• issuer_summary/issuers/avic_international_leasing/working/avic_international_leasing_20260520_writing_plan.md

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