JULY 28TH, 2015
Fitch Affirms Willis Engine Securitization Trust II (WEST II)
CHICAGO—(BUSINESS WIRE)—Fitch Ratings has affirmed Willis Engine Securitization Trust II Class 2012-A term notes (WEST II) at ‘Asf’; Outlook Stable.
KEY RATING DRIVERS
The affirmation of WEST II term notes at ‘Asf’ reflects the performance to date along with the results of Fitch’s review of the transaction. Since close, rent collections have been stable and above Fitch’s initial expectations. Meanwhile, all principal payments have been made as scheduled. The majority of the engine portfolio supports current-generation narrow-body aircraft from which Fitch expects stable performance in the medium term. Additionally, the notes are able to pay in full under Fitch’s cash flow analysis under an ‘Asf’ rating scenario. The Stable Outlook reflects Fitch’s expectation of stable rating performance on this transaction. Initial key rating drivers and the rating sensitivities are further described in Fitch’s report for this transaction dated Sept. 6, 2012.
Due to the correlation between global economic conditions and the airline industry, the ratings may be affected by the strength of the macro-environment over the remaining term of this transaction. Global economic scenarios that are inconsistent with Fitch’s expectations could lead to rating actions. Fitch, in the initial rating analysis, found the transaction to have limited sensitivity to the timing of the first recession the transaction may experience.
Additionally, changes in the airline industry can have significant impact on the ratings of this transaction. In the initial review, Fitch found the timing or degree of technological advancement in the commercial aviation space to have a moderate impact on the rating. While these factors may have a moderate impact on transaction performance, expectation of the, factors influencing the supply of and demand for the engines in this portfolio could have a larger impact on the notes’ rating.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch’s analysis of the Representations and Warranties (R&W) of this transaction can be found in ‘Willis Engine Securitization Trust II – Appendix’. These R&W are compared to those of typical R&W for the asset class as detailed in the special report ‘Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions’ dated May 28, 2015.
Additional information is available at www.fitchratings.com.