Moody's announced yesterday that the execution of Amendment to Exhibit C of the Trust Indenture (the Amendment), to revise the "Prohibited Country" provisions and modify the ability of the servicer, AerCap Ireland Limited, to place a specific aircraft within Nigeria, would not, in and of itself and as of this time, result in a reduction or withdrawal of the ratings currently assigned to the Series 2007-1 Notes (the Notes) issued by Aircraft Lease Securitization Limited.
Since the transaction closed in 2007, Nigeria has been on the "Prohibited Country" list, which means that the servicer could not place any aircraft with a lessee or sub-lessee domiciled in this jurisdiction. The Amendment would redesignate Nigeria from "Prohibited" to "Undesignated" only in respect of one Airbus A319-100 (MSN 1612) aircraft for a term of 48 months.
In assessing the potential impact on the ratings of the Notes, Moody's assessed the value of the approved aircraft in the context of the overall value of the aircraft pool underlying the transaction, the length of the exposure, and the experience and expertise of AerCap in leasing aircraft to airlines in emerging markets, including Nigeria. Moody's notes that the change in classification for Nigeria is for specific aircraft for a limited time period, and that this will be an operating lease. In addition, the aircraft to be leased to Nigeria accounts for a small percentage of the underlying pool of aircraft, approximately 1.8% based on the most recent appraisals.
Moody's has determined that the Amendment, in and of itself and at this time, will not result in a reduction or withdrawal of the ratings currently assigned to the Notes. However, Moody's opinion addresses only the credit impact associated with the Amendment, and Moody's is not expressing any opinion as to whether the Amendment has, or could have, other non-credit related effects that may have a detrimental impact on the interests of noteholders and/or counterparties.