Fitch Affirms American Airlines 2013-2 Certificates

CHICAGO--()--Fitch Ratings has affirmed the ratings for American Airlines 2013-2 Series of enhanced equipment trust certificates (EETCs) as follows:

--Class A certificates due Jan. 2023 at 'BBB+';

--Class B certificates due Jul. 2022 at 'BB+';

--Class C certificates due Jan. 2017 at 'BB-'.

KEY RATING DRIVERS

The ratings are supported by a significant amount of overcollateralization, a very large asset pool of 75 aircraft which supports a high affirmation factor, and good quality collateral. Fitch's review of the transaction was driven by new appraisal data that showed weakening values for some of the collateral in this pool, particularly for older vintage 737-800s and 777-200ERs. However, despite some recent deterioration in appraised values, the class A certificates continue to pass Fitch's 'BBB' level stress test; therefore the ratings have been affirmed at 'BBB+'. The subordinated tranche ratings are notched off of American Airline's issuer Default Rating (IDR) based on the affirmation factor, which Fitch considers to be high for this transaction, and on the presence of an 18-month liquidity facility.

KEY ASSUMPTIONS

Key assumptions in Fitch's rating case include:

An American Airlines bankruptcy driven by a severe aviation downturn, leading to a sale of the collateral aircraft to cover the outstanding EETC debt.

RATING SENSITIVITIES

Senior tranche ratings are primarily based on a top-down analysis based on the value of the collateral. Therefore, a negative rating action could be driven by an unexpected decline in collateral values. Senior tranche ratings could also be affected by a perceived change in the affirmation factor or deterioration in the underlying airline credit. Fitch does not expect to upgrade the senior tranche ratings above 'BBB+'

Subordinated tranches are directly influenced by American Airlines' IDR. Therefore, the certificate ratings could be upgraded or downgraded depending on Fitch's rating actions for the airline.

Summary of Financial Statement Adjustments - Fitch has made no material adjustments that are not disclosed within the company's public filings.

Additional information is available on www.fitchratings.com

Applicable Criteria

Corporate Rating Methodology - Including Short-Term Ratings and Parent and Subsidiary Linkage (pub. 17 Aug 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=869362

Rating Aircraft Enhanced Equipment Trust Certificates (pub. 13 Oct 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=871079

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1003763

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1003763

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Joe Rohlena, CFA
Director
+1-312-368-3112
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Craig D. Fraser
Managing Director
+1-212-908-0310
or
Committee Chairperson
Stephen Brown
Senior Director
+1-312-368-3139
or
Media Relations
Alyssa Castelli
+1-212-908-0540
New York
alyssa.castelli@fitchratings.com

Contacts

Fitch Ratings
Joe Rohlena, CFA
Director
+1-312-368-3112
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Craig D. Fraser
Managing Director
+1-212-908-0310
or
Committee Chairperson
Stephen Brown
Senior Director
+1-312-368-3139
or
Media Relations
Alyssa Castelli
+1-212-908-0540
New York
alyssa.castelli@fitchratings.com