Enhanced equipment trust certificates (EETCs) have been under severe pressure due to COVID-19, paralleling the effects of the pandemic on the airlines that issue them. Responding to a recent request to revise the EETC ratings methodology, S&P Global Ratings has issued a frequently asked questions paper about its ratings on EETCs.
S&P notes in the paper that almost all the EETCs it rates have been downgraded since the start of this year, with rating changes that span from no effect to a nine-notch downgrade for an EETC issued by Latam, which filed for bankruptcy in May. Most actions were caused due to downgrades in the issuer credit ratings as all airlines have been adversely impacted by the pandemic.
Access the paper here.