NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (“KBRA”) announces the preliminary ratings to two classes of notes issued by Fan Engine Securitization Limited (“Fan”). The notes are newly issued asset-backed securities related to a portfolio of aircraft engine assets and related leases.
The notes issued by Fan will be supported by a portfolio of 35 aircraft engines, initially leased to 20 lessees located in 13 countries. The preliminary ratings reflect initial credit enhancement comprised of overcollateralization, subordination of a junior note class for Class X noteholders, a maintenance reserve account, as well as a liquidity facility provided by BNP Paribas S.A. sized at closing to 5% of the outstanding principal balance on both note classes.
GE Capital Aviation Services Limited (“GECAS”) will act as Servicer for the Fan portfolio. KBRA views GECAS as a strong servicer, with a highly experienced staff and the global presence to effectively remarket, maintain and repossess the engines in the Fan portfolio over the life of the transaction.
KBRA analyzed the transaction using the General Rating Methodology for Asset-Backed Securities published on July 30, 2012. The Fan transaction falls within Category 2 – Operating Assets which includes transactions that are typically backed by pools of short-term loans or leases on long-lived assets. KBRA conducted an on-site operational review of GECAS at its Stamford, CT offices in October 2013 and will review the operative agreements and legal opinions for the transaction prior to closing.
For complete details on the analysis, a formal report will follow.
Expected Initial Principal Balance
General Rating Methodology for Asset-Backed Securities
About Kroll Bond Rating Agency
KBRA was established in 2010 by Jules Kroll to restore trust in credit ratings by creating new standards for assessing risk and by offering accurate, clear and transparent ratings. KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (“NRSRO”). In addition, KBRA is recognized by the National Association of Insurance Commissioners (“NAIC”) as a Credit Rating Provider (“CRP”).