S&P rates United Airlines certificates A

S&P said it assigned its preliminary A (sf) issue-level rating to United Airlines Inc.’s $3 billion series 2020-1 class A pass-through enhanced equipment trust certificates.

“The certificates, the largest dollar amount ever offered by an airline, are backed by 352 fairly old (mostly 15-24 years) aircraft, substantially all of the aircraft spare parts, and substantially all of the spare engines that support the operation of United’s overall aircraft fleet,” S&P said.

The agency said it based the rating on United’s credit quality, the essentiality of spare parts and engines to the operation of the airline, substantial collateral coverage and rapid amortization and the legal and structural protections available to the certificates.

The certificates have expected final distribution dates of Oct. 15, 2027, with legal final maturity 18 months later. United may offer class B junior certificates in the future.

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