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

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 a CF34-3B1 and an RB211-535E4 out of the trust to third parties. The two engines are currently grounded. Thus, their sale would provide cash flow to the trust from what would otherwise be non-earning assets. The proposed sale price of each engine is below the note target price as defined by the transaction documents. Fitch does not anticipate that the engine sales, in and of themselves, would adversely impact the ratings on the trust.

It is important to note however, that all notes currently have a Negative Rating Outlook, indicating that downward rating movements are likely over a one- to two-year period. As stated in Fitch’s Feb. 14 press release affirming 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 ‘Asf’; Outlook Negative;

—Class A-2 notes ‘Asf’; Outlook Negative;

—Class B-1 notes ‘BBBsf’; Outlook Negative.

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