Fitch Ratings Downgrades Blade Engine Securitization LTD

NEW YORK--()--Fitch Ratings has downgraded Blade Engine Securitization LTD as follows:

--Series A-1 to 'BBBsf' from 'Asf'; Outlook to Stable from Negative;

--Series A-2 to 'BBBsf' from 'Asf'; Outlook to Stable from Negative;

--Series B to 'BBsf' from 'BBBsf;' Outlook Negative.

KEY RATING DRIVERS

The downgrade of the notes reflects recent performance and deteriorating asset quality of the portfolio. A substantial percentage of the pool supports older technology engines which Fitch expects to experience deteriorating cash flows in the future. As such, future collections on the portfolio of assets will be largely dictated by engines that support widebody aircraft. However, series A is still consistent with an investment grade rating. The Negative Outlook on class B reflects the numerous draws on the Junior Cash account to pay class B interest and its subordinated position in the waterfall.

RATING SENSITIVITIES

Due to the correlation between the global economic conditions and the airline industry, the ratings may be impacted by the strength of the macro-environment over the remaining term of the transaction. Global economic scenarios that are inconsistent with Fitch's expectations could lead to further negative rating actions. For example, the occurrence of an extended global recession of significantly greater severity than the last two experienced, and the resulting strain on engine lease cash flow, could lead to a downgrade of the notes.

In addition, changes in the airline industry can have a significant impact on the ratings of this transaction. If the timing of or degree of technological advancement in the commercial aviation space differs materially from Fitch's expectations, a rating movement may occur. Similarly, factors influencing the supply and demand for the engines in the trust's portfolio could directly impact Fitch's view of the transaction.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria available on Fitch's web site at www.fitchratings.com:

--'Global Rating Criteria for Aircraft Operating Lease ABS,' dated April 11, 2014

--'Global Structured Finance Rating Criteria,' dated Aug. 4, 2014

--' Blade Engine Securitization Ltd. Series 2006-1A and 2006-1B,' dated Aug. 15, 2006

Applicable Criteria and Related Research:

Blade Engine Securitization Ltd. Series 2006-1A and 2006-1B

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=285744

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Global Rating Criteria for Aircraft Operating Lease ABS - Effective Apr. 25, 2011 to Apr. 17, 2012

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=620835

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=979446

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
Primary Analyst
Thomas Kaiser, CPA
Associate Director
+1 312-368-3338
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Peter Manofsky
Director
+1 312-368-2068
or
Committee Chairperson
Hylton Heard
Senior Director
+1 212-908-0214
or
Media Relations, New York
Sandro Scenga
+1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Thomas Kaiser, CPA
Associate Director
+1 312-368-3338
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Peter Manofsky
Director
+1 312-368-2068
or
Committee Chairperson
Hylton Heard
Senior Director
+1 212-908-0214
or
Media Relations, New York
Sandro Scenga
+1 212-908-0278
sandro.scenga@fitchratings.com