AAR Corp. ICR Affirmed On Credit Metric Cushion Despite Likely Decline In Demand Due To The Coronavirus, Outlook Stable

The coronavirus pandemic has caused many airlines to cut back on the number of flights they are operating, which will likely reduce the demand for AAR Corp.'s maintenance, repair, and overhaul (MRO) services and aftermarket parts. Although this will likely reduce its earnings and cash flow over the next 12-24 months, we feel that the company has a substantial cushion in its credit metrics at the current rating. Therefore, we are affirming our 'BB+' issuer credit rating on AAR. The stable outlook reflects our expectation that the company's credit metrics will likely deteriorate but remain appropriate for the current rating despite its reduced earnings stemming from the coronavirus pandemic. NEW YORK (S&P Global Ratings) April 9, 2020—S&P Global Ratings today

...April 9, 2020 - The coronavirus pandemic has caused many airlines to cut back on the number of flights they are operating, which will likely reduce the demand for AAR Corp.'s maintenance, repair, and overhaul (MRO) services and aftermarket parts. - Although this will likely reduce its earnings and cash flow over the next 12-24 months, we feel that the company has a substantial cushion in its credit metrics at the current rating. - Therefore, we are affirming our '##+' issuer credit rating on AAR. - The stable outlook reflects our expectation that the company's credit metrics will likely deteriorate but remain appropriate for the current rating despite its reduced earnings stemming from the coronavirus pandemic. NEW YORK (S&P Global Ratings) April 9, 2020--S&P Global Ratings today took the rating action listed above. AAR's earnings will likely decline because of the coronavirus. AAR derives about 60%-65% of its revenue from the commercial aerospace aftermarket and generates the remainder...

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