KBRA Releases Research – Aviation ABS Payment Status: Behind Schedule

NEW YORK–(BUSINESS WIRE)–#KBRA–KBRA releases a report highlighting the payment status of aviation asset-backed securities (ABS). Aviation ABS lease transactions were the hardest hit by COVID-19, from a credit perspective, among all structured finance sectors. Stay-at-home orders, border restrictions, and general travel aversion led to plummeting air demand. This in turn gave rise to a meaningful deterioration in demand for aircraft and transaction cash flow which subsequently resulted in significant rating downgrades across the sector. These performance-based issues were then further exacerbated by the Russia-Ukraine conflict.

As a result of the rebound in travel and recent strength of the current global aviation industry, we reexamine these securities, specifically those that fell behind in scheduled principal and/or experienced interest deferrals. Despite notable improvements among the senior and mezzanine classes, such progress has been exceedingly modest given the time it takes securities to catch up on previously unpaid scheduled principal and/or interest. Many of the more junior bonds remain locked out of all cash flows, continue to defer interest, and are behind on scheduled principal.

In this report, KBRA provides observations across our 63 rated aviation ABS lease transactions, including the principal and interest payment status of 171 KBRA-rated securities, the Russia‑Ukraine conflict exposure, potential implications for aviation ABS, as well as other themes.

Click here to view the report.

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About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.


Preston Boutwell, Associate, ABS Commercial

+1 646-731-2367

[email protected]

Michael Lepri, Director, ABS Commercial

+1 646-731-3389

[email protected]

Alan Greenblatt, Managing Director, ABS Commercial

+1 646-731-2496

[email protected]

Additional Contacts

Eric Neglia, Senior Managing Director, Head of Commercial and Consumer ABS

+1 646-731-2456

[email protected]

Eric Thompson, Senior Managing Director, Head of Global Structured Finance Ratings

+1 646-731-2355

[email protected]

Business Development

Rosemary Kelley, Senior Managing Director, Business Development

+1 646-731-2337

[email protected]

Arielle Smelkinson, Senior Director, Business Development

+1 646-731-2369

[email protected]

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