CHICAGO--(BUSINESS WIRE)--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 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.
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
Corporate Rating Methodology - Including Short-Term Ratings and Parent and Subsidiary Linkage (pub. 17 Aug 2015)
Rating Aircraft Enhanced Equipment Trust Certificates (pub. 13 Oct 2015)
Dodd-Frank Rating Information Disclosure Form