Fitch Ratings has completed a review of nine public aircraft EETC transactions issued by United Airlines with 21 rated tranches. Fitch has downgraded six tranches of United Airlines' EETCs including the 2019-2 class A, 2018-1 class A, 2016-2 class AA and A, 2016-1 class A, and 2012-2 class A. Fitch has affirmed United's other enhanced equipment trust certificate (EETC) ratings, including the B tranches for the 2019-2 and 2018-1, 2016-2, and 2016-1 transactions and all tranches of four other transactions. Fitch has also removed United's 2019-1, 2018-1 and 2016-2 certificates from Rating Watch Negative (RWN).
The downgrades are primarily driven by weakened collateral coverage driven by lower secondary market values for the 777-300ERs contained in the affected transactions. While loan-to-value ratios for United's other EETC transactions have also weakened since Fitch's prior review, collateral coverage remains adequate to pass the relevant stress scenarios supporting the current senior tranche ratings. Subordinate tranche ratings have been affirmed at their existing levels despite Fitch's recent downgrade of United from 'BB-' to 'B+'. The affirmations reflect a wider notching band for subordinate EETC tranches for issuers rated in the 'B' category.