NEW YORK--(EON: Enhanced Online News)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes (the “Notes”) issued by Merlin Aviation Holdings DAC.
Proceeds from the sale of the Notes will be used to purchase from certain affiliates of Aviation Capital Group Corp. (“ACG”) or refinance a fleet of 18 aircraft (the “Portfolio”) on lease to 17 airlines located in 16 countries via either a direct transfer of title of such assets to newly formed subsidiaries of the Issuer or the acquisition, directly or indirectly, of the beneficial interests in certain aircraft owner trusts. The Portfolio has an initial value of approximately $334.4 million, based on the average of the base values provided by three appraisers, which includes an adjustment by ICF SH&E, Inc. to reflect the expected maintenance condition of each aircraft as of November 30, 2016.
ACG Aircraft Leasing Ireland Limited will act as the Servicer for the transaction. The Servicer is a wholly-owned subsidiary of ACG. KBRA notes that the initial owners of the Class E Notes are entities controlled by Avenue Capital Group.
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.
KBRA analyzed the transaction using the Aviation ABS Methodology published on October 26, 2016.
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.
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