Fitch Downgrades and Withdraws AerCo Limited's Ratings

CHICAGO—(BUSINESS WIRE)—Fitch Ratings has taken the following rating actions on AerCo Limited:

—Class A-3 notes downgraded to ‘Csf’/RE 50% from ‘CCsf’ and withdrawn;
—Class B-1 and B-2 affirmed at ‘Csf’/RE 0% and withdrawn;
—Class C-1 and C-2 affirmed at ‘Dsf’/ RE 0%; and withdrawn;
—Class D-2 affirmed at ‘Dsf’/RE 0% and withdrawn;

KEY RATING DRIVERS
The downgrade of the class A-3 notes to ‘Csf’ reflects Fitch’s view that default is considered inevitable. The outstanding class A-3 note balance significantly exceeds the value of trust collateral. Furthermore, the few remaining aircraft consist predominately of older illiquid aircraft which Fitch believes will be unable to generate sufficient cash flow to repay the notes in full. The recovery estimate of 50% reflects Fitch’s expectation of principal payments relative to the current class A-3 note balance.

The affirmation of class B-1 and B-2 notes at ‘Csf’ as well as class C-1, C-2, and D-2 notes at ‘Dsf’ reflect Fitch’s expectation of inevitable default. The recovery estimate is 0% on each of these classes as no principal is expected to be paid as interest shortfalls continue to grow for the subordinate notes and any collections will only be applied to class A-3 interest and principal.

Fitch has withdrawn its ratings on the transaction as its coverage is no longer considered relevant given Fitch’s expectation that default of the notes is considered inevitable.

Additional information is available at ‘www.fitchratings.com’

Applicable Criteria and Related Research:
-‘Global Structured Finance Rating Criteria’ dated May 24, 2013;
-‘Structured Finance Recovery Estimates for Distressed Securities’ dated Nov. 16, 2012;
—‘Global Rating Criteria for Aircraft Operating Lease ABS,’ dated April 12, 2013.

Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
Structured Finance Recovery Estimates for Distressed Securities
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=656557
Global Rating Criteria for Aircraft Operating Lease ABS
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=704628