Fitch Ratings has downgraded the outlook on a number of notes issued by Sapphire Aviation Finance from rating watch negative to rating outlook negative.
In addition to changing the rating on the series A, B and C fixed-rate secured notes issued by Sapphire Aviation Finance I Limited (SAPA I), Fitch affirmed the ratings on the Sapphire Aviation Finance II Limited (SAPA II) series A, B and C fixed-rate secured notes were maintained at rating outlook negative.
Fitch said the rating actions reflect ongoing deterioration of all airline lessee credits backing the leases in each transaction pool, downward pressure on certain aircraft values, Fitch's updated assumptions and stresses, and resulting impairments to modelled cash flows and coverage levels.
On March 31 Fitch placed the series B and C notes of SAPA I on RWN, while all other series of notes in SAPA I and SAPA II were placed on RON as a part of its aviation ABS portfolio review due to the ongoing impact of the coronavirus on the global macro and travel/airline sectors. This unprecedented worldwide pandemic continues to evolve rapidly and negatively affect airlines across the globe.
Avolon Aerospace Leasing Limited (Avolon) and certain affiliates are the sellers for the assets and is an indirect subsidiary of Avolon Holdings Limited (IDR currently at BBB-/Negative). Avolon and certain of their subsidiaries are the initial sellers, and Avolon acts as servicer to both transactions.