Fitch downgrades Spirit Airlines' Class B certificates

Fitch Ratings has downgraded Spirit Airlines' 2017-1 class B certificates to B+ from BB. The downgrade is driven by Fitch's recent downgrade of Spirit's Issuer Default Rating (IDR) to CCC from B-. Fitch has also affirmed the 2017-1 class AA certificates at A+, the class A certificates at A and the 2015-1 class A certificates at A. According to Fitch, the class A certificates are supported by “healthy overcollateralization” with lan-to-values (LTVs) for both the 2017-1 and 2015-1 transactions that “remain relatively steady since Fitch's last review, and base values for the A321s and A320s in these portfolios have performed in line with Fitch's standard depreciation assumptions over the last year”. Fitch confirmed that should Spirit enter bankruptcy, it would further downgrade the class B certificates but it tempered the statement with the comment that “modest LTVs and good recovery prospects may support ratings in the low 'B' or high 'CCC' range”.