Fitch Affirms CIT Aviation Finance III Ltd.

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings affirms the following CIT Aviation Finance III Ltd. notes:

Class A-1 notes at 'Asf'; Outlook Stable.

KEY RATING DRIVERS

The affirmation of the notes reflects the transaction's consistent performance to date which has been within Fitch's initial expectations. The Stable Outlook reflects Fitch's expectation that cash flow from the portfolio of aircraft will continue to be adequate to withstand stresses commensurate with the current ratings. Initial key rating drivers and the rating sensitivities are further described in Fitch's Presale Report for this transaction dated June 2014.

RATING SENSITIVITIES

Due to the correlation between the global economic conditions and the airline industry, the ratings may be impacted by the strength of the macro environment over the remaining term of these transactions. A such, in its review of CAF III Fitch evaluated scenarios that simulated various timing and severity of future recessions that would impact the transaction through reduced aircraft values, lease rates and utilization levels. Under these scenarios, the class A-1 notes showed little rating sensitivity.

Additionally, changes in the airline industry can have significant impact on the ratings of these transactions. If the timing of or degree of technological advancement commercial aviation space differed materially from Fitch's expectations, performance could be affected. Similarly, factors influencing the supply of and demand for the certain aircraft types present in the trust portfolios could impact Fitch's view of the transactions' ability to avoid a default on the notes and, thus, could result in negative rating actions. In a review of sensitivities designed to mimic significant drops in aircraft demand and shorter asset useful lives owing to these factors, the class A-1 notes were shown to have only minor rating sensitivity, retaining investment grade ratings in all cases.

Fitch's stress and rating sensitivity analysis are discussed in the presale report titled 'CIT Aviation Finance III Ltd.', dated June 30, 2014, which is available on Fitch's web site.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Fitch's analysis of the Representations and Warranties (R&W) of this transaction can be found in 'CIT Aviation Finance III Ltd. -- Appendix' dated June 30, 2014. These R&W are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated March 26, 2015.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Global Rating Criteria for Aircraft Operating Lease ABS (pub. 19 May 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864605

Global Structured Finance Rating Criteria (pub. 31 Mar 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=986635

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=986635

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150618006185/en/

Fitch Ratings
Primary Analyst
Thomas Kaiser, CPA
Associate Director
+1 312-368-3338
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Committee Chairperson
Du Trieu
Senior Director
+1 312-368-2091
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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