Fitch acts on Spirit Airlines certificates

Fitch Ratings said it downgraded Spirit Airlines’ 2017-1 class AA enhanced equipment trust certificates to AA- from AA. The certificates remain on rating watch negative. Fitch affirmed Spirit’s 2017-1 class A and B certificates and Spirit’s 2015-1 class A and B certificates.

“The downgrades of the AA certificates are driven by the combined effects of increased value stress assumptions used in Fitch’s models, which reflect the ongoing pressure on the airline industry, and updated appraisal values that show declining levels of overcollateralization,” Fitch said in a press release.

Fitch said the class AA certificates remain on rating watch negative, indicating limited headroom at the current rating level and additional layers of risk to aircraft values driven by the pandemic’s effects.

The affirmation of Spirit’s 2017-1 and 2015-1 class A certificates reflects healthy levels of overcollateralization and attractive underlying collateral that support the ratings, the agency said.

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