Fitch has affirmed the ratings on various other American Airlines EETCs
as shown at the bottom of this release.
Fitch's methodology for senior EETC
tranche ratings is primarily driven by a top-down analysis incorporating a series of stress tests which simulate the rejection and repossession of the aircraft in a severe aviation downturn.
Popular financing tools for the region's airlines could include EETCs
, bonds specifically to pay for aircraft that aren't yet widely used locally, Sidanth Rajagopal, aviation finance partner at Clyde & Co, said by phone on December 30.
Putting airplanes, the carriers' main long-term asset, into a special-purpose trust to protect investors in case of an airline default or insolvency makes EETCs
were issued through SPV DNA Alpha, and the aircraft when purchased will be held by the SPV and leased to Emirates until maturity, at which point Emirates will assume ownership of the planes.
After the 15 October maturity of the 1999 EETCs
the new notes will be secured by 12 of the 15 aircraft that currently secure the 1999 EETCs
and the cash collateral will be released to the company.
The transaction amortizes quickly compared to many publicly issued EETCs
. The initial tenor upon issuance was nine years and the initial weighted average life was six years, compared to roughly 12 and nine years respectively for many comparable transactions.
is a financial security used in aircraft finance where the airline gets ownership of the planes on maturity of the certificates.
Fitch Ratings has placed Northwest Airlines Corp's Enhanced Equipment Trust Certificate (EETC
) transactions on Rating Watch Positive.
Fitch has also upgraded the class B certificates for United's 2014-2 and 2012-2 series of enhanced equipment trust certificates (EETCs
) to 'BBB+' from 'BBB' and affirmed the ratings for United's other outstanding enhanced equipment trust certificates (EETCs
The airline is reportedly considering using Enhanced Equipment Trust Certificates (EETCs
) for the first time - financial securities issued by banks under which the airline gets ownership of the planes when the certificates mature, bankers familiar with the negotiations told Reuters.