MRO Magazine

Fitch: Rating Impact Unlikely for Blade ABS on Aircraft Engine Sale


October 27, 2015
By Business Wire News

CHICAGO

Blade Engine Securitization LTD’s (Blade) intent to sell two aircraft engines is not likely to impact ABS ratings, according to Fitch Ratings.

Fitch has been notified that Blade intends to sell two CFM56-B2s out of the trust to a third party. The engines are currently grounded. Thus, its sale would provide cash flow to the trust from what would otherwise be a non-earning asset. The proposed sale prices of these engines are below the note target price as defined by the transaction documents. Fitch does not anticipate that the engine sales, in and of itself, would adversely impact the ratings on the trust.

However, the class B notes currently have a Negative Rating Outlook, indicating that downward rating movement is likely over a one- to two-year period. As stated in Fitch’s February 2015 press release downgrading all outstanding notes, the Negative Outlook reflects Fitch’s concerns regarding the engines’ ability to generate sufficient collections and repay the notes under certain stress rating scenarios.

Fitch currently rates the trust as follows:

Blade Engine Securitization LTD

–Class A-1 notes ‘BBBsf’; Outlook Stable;

–Class A-2 notes ‘BBBsf’; Outlook Stable;

–Class B-1 notes ‘BBsf’; Outlook Negative.

Additional information is available on www.fitchratings.com.

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.

Fitch Ratings
Primary Analyst:
Thomas Kaiser, CPA, +1-312-368-3338
Associate Director
Fitch Ratings, Inc.
70 W. Madison Street,
Chicago, IL 60602
or
Media Relations:
Sandro Scenga, +1-212-908-0278
New York
sandro.scenga@fitchratings.com