Fitch Updates Global Aircraft Operating Lease ABS Rating Criteria

CHICAGO--Fitch Ratings has updated its global aircraft operating lease asset backed securities (ABS) rating criteria. The updated criteria report describes several enhancements to Fitch's operating lease ABS credit analysis, including:

--The introduction of a rating cap of 'A' for most transactions;

--The refinement and disclosure of stress assumptions related to aircraft aging, asset values and lease rates.

Some of these enhancements were already being incorporated in Fitch's analysis since the 2007/2008 time period. However, the changes, notably the rating cap, evidence the asset class' historically volatile performance and significant exposure to risks such as:

--Aviation market cyclicality;

--Heavy reliance on the servicer;

--The presence of re-leasing risk; and

--The exposure to multiple legal jurisdictions.

The updated criteria will apply to the existing portfolio of operating lease aircraft ratings. Fitch anticipates minimal rating changes to result from the implementation of these criteria. Any rating actions directly resulting from the implementation of these criteria are expected to be limited to a single rating category.

The report titled 'Global Rating Criteria for Aircraft Operating Lease ABS' dated March 31, 2010 can be found on Fitch's public website at www.fitchratings.com.

Additional information is available at www.fitchratings.com

Related Research: Global Rating Criteria for Aircraft Operating Lease ABS
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=508588

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