Upgrade of Regional 2021-1 from BBB+ to A- by KBRA
Kroll Bond Rating Agency (KBRA) has upgraded the rating of Falko’s Regional 2021-1 ABS Series A loans from BBB+ to A-.
In April 2021, Falko closed its inaugural aviation ABS transaction issuing $255m of Series A loans, the first ABS transaction completed since the COVID-19 pandemic which is exclusively secured by regional aircraft assets. At closing, the portfolio comprised of 39 assets, 25 regional jet aircraft and 14 turboprop aircraft on lease to nine lessees, increasing to 11 lessees across nine countries as of March 2023.
KBRA states that “the upgrade of the Series A loans is owed to the collateral performance and overall performance of the transaction. Since closing, the Series A loans have received all scheduled interest and principal payments”.
KBRA has downgraded securities from over 50 aviation ABS transactions owing to performance issues resulting from COVID-19 related industry disruption and the Russia/Ukraine conflict; however, no securities in Regional 2021-1 have been downgraded post issuance.