Fitch Ratings - New York - 09 May 2019: Fitch Ratings has affirmed Willis Engine Securitization Trust II (WEST II) class 2012-A term notes at 'Asf'. The Rating Outlook is Stable.
KEY RATING DRIVERS
The affirmation of the notes reflects solid performance to date. Lease cash flows and sales proceeds have been above Fitch's modeled expectations and the notes are paying according to schedule. The LTV level has declined in the past year. While the LTV has increased slightly since close, this has not had a negative impact on transaction performance. Lease and maintenance collections have been sufficient to service the notes.
Cash flow modeling analysis was not completed for this review, but was completed for the prior rating analysis conducted in June 2018. Per Fitch's criteria, updated modeling analysis need not be completed if it has been done within the last 18 months and transaction performance metrics are in line with prior expectations.
Due to the correlation between global economic conditions and the airline industry, the ratings may be impacted by the strength of the macro-environment over the remaining term of this transaction. Global economic scenarios that are inconsistent with Fitch's expectations could lead to rating actions. Fitch, in the initial rating analysis, found the transaction to have limited sensitivity to the timing of the first recession the transaction may experience.
Additionally, changes in the airline industry can have significant impact on the ratings of this transaction. In the initial review, Fitch found the timing or degree of technological advancement in the commercial aviation space to have a moderate impact on the rating. While these factors may have a moderate impact on the performance expectation of the transaction, factors influencing the supply of and demand for the engines in this portfolio could have a larger impact on the note's rating.