Fitch Affirms Ratings for British Airways 2013-1 Class A and Class B Certificates

CHICAGO—(BUSINESS WIRE)—Fitch Ratings has affirmed the ratings for British Airways Pass Through Trusts Series 2013-1 as follows:

—Class A certificates at ‘A’

—Class B certificates at ‘BBB’

The A-tranche rating is primarily driven by a top-down analysis which evaluates the level of overcollateralization and likely recovery in a stress scenario. In the year since this transaction was launched market values for the collateral aircraft (787-8, 777-300ER, and A320-200) have performed in line with Fitch’s expectations. As a result, stress case LTVs (the primary senior tranche ratings driver) have not changed materially.

The maximum LTV produced by Fitch’s stress scenario is 86.7%, which implies a significant amount of cushion for senior tranche certificate holders. The ratings are also supported by a strong collateral package consisting of new-delivery Tier 1 aircraft, an 18-month liquidity facility, cross-collateralization/cross-default features, and Fitch’s assessment of the UK insolvency regime. The rating incorporates a secondary dependence on the credit quality of BA as the obligor under the leases.

The ‘BBB’ rating for the B-tranche is based on a ratings uplift compared with BA’s stand-alone credit profile, largely based on a high Affirmation Factor and the presence of an 18 month liquidity facility. The affirmation factor for this pool is considered high as all three aircraft types in the transaction are core to BA’s fleet plan. Fitch believes that the likelihood of these aircraft being affirmed in a restructuring scenario effectively reduces the B-tranche probability of default compared to BA’s credit profile.