Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three series of notes (the “Notes”) issued by START II Ltd. and START II USA LLC (together, “STARR II” or the “Issuers”).
GE Capital Aviation Services Limited will act as servicer for the transaction (“GECAS”, the “Company” or the “Servicer”). This transaction is the fifteenth third party portfolio securitization serviced by GECAS and the fourth of those rated by KBRA. KBRA notes that an affiliate of GECAS will be acquiring a small minority percentage of the equity in STARR II.
Proceeds from the sale of the Notes will be used to acquire 20 aircraft (the “Portfolio”) on lease to 13 lessees located in 11 countries. As of March 1, 2019, the initial weighted average aircraft age of the Portfolio is approximately 5.9 years, with a weighted average remaining lease term of approximately 6.6 years. The Portfolio consists of 100% narrowbody aircraft. The Portfolio has an initial value of approximately $588.7 million, based on the average of the half-life base values provided by three appraisers as of September 2018 and adjusted for maintenance conditions as determined by Alton Aviation Consultants LLC (“Alton”) as of March 2019. Comparatively, the Portfolio has an aggregate maintenance-adjusted current market value of approximately $597.5 million.
The transaction benefits from sufficient credit enhancement and liquidity, as well as a dynamic structure that accelerates principal payments on the Notes in the event of weak performance.
The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.