MAPS 2019-1 Ltd./MAPS 2019-1 U.S. LLC Assigned Ratings


  • MAPS 2019-1 Ltd.'s issuance is an ABS securitization backed by 19 aircraft and the related leases and shares and beneficial interests in entities that directly and indirectly receive aircraft portfolio lease rental and residual cash flows, among others.
  • We assigned our ratings to the series A, B, and C notes.
  • The ratings reflect our view of the transaction's initial asset portfolio and the existing and future lessees' estimated credit quality and diversification, among other factors.
NEW YORK (S&P Global Ratings) March 15, 2019--S&P Global Ratings today 
assigned its ratings to MAPS 2019-1 Ltd.'s series A, B, and C fixed-rate 2019-1
 (see list).

The note issuance is backed by 19 aircraft and the related leases and shares 
and beneficial interests in entities that directly and indirectly receive 
aircraft portfolio lease rental and residual cash flows, among others.

The ratings reflect the following:
  • The likelihood of timely interest on the series A notes (excluding step up interest) on each payment date, the timely interest on the series B notes (excluding step up interest) when series A notes are no longer outstanding on each payment date, the ultimate interest on the series C notes (excluding step up interest), and the ultimate principal payment on the series A, B, and C notes on or prior to the legal final maturity at the respectively rating stress ('A', 'BBB', 'BB').
  • The approximately 63% loan-to-value ratio (LTV, based on the lower of the mean and median [LMM] of the half-life base value [HLBV] and the half-life current market value [HLMV]) on the series A notes, the 76.4% LTV on the series B notes, and the 83% LTV on the series C notes.
  • The aircraft portfolio comprises popular narrow-body aircraft (48% B737 family, 42% A320 Family) and 11% A330-200 wide-body aircraft by LMM of the half-life value. All of the aircraft models are in production.
  • The weighted average age (by value) of the aircraft in the portfolio is 8.5 years. Currently, 18 of the 19 aircraft are on lease, with weighted average remaining maturity of approximately 5.2 years (excluding the off-lease aircraft).
  • Some of the lessees are in emerging markets where the commercial aviation market is growing.
  • The existing and future lessees' estimated credit quality and diversification. The 18 on-lease aircraft are currently leased to 13 airlines in eight countries, many of the initial lessees have low credit quality, and approximately 59% of lessees (by aircraft value) are domiciled in emerging markets. Four of the 19 aircraft are leased to flag carriers internationally.
  • Each series' scheduled amortization profile, which is straight line over 12.5 years for series A and B, and straight line over seven years for series C.
  • The transaction's debt service coverage (DSC) ratios and utilization trigger--a failure of which will result in the series A and B notes' turbo amortization; turbo amortization for the series A and B notes will also occur if they are outstanding after year seven.
  • The end-of-lease payment will be paid to the series A, B, and C notes according to a percentage equaling to each series' then-current LTV ratio.
  • The subordination of series C principal and interest to series A and B principal and interest.
  • A revolving credit facility that Credit Agricole will provide, which is available to cover senior expenses, including hedge payments and interest on the series A and B notes. The amount available under the facility will equal nine months of interest on the series A and B notes.
  • Alton Aviation Consulting performed a maintenance analysis before closing. After closing, the servicer will perform a forward-looking 18-month maintenance analysis at least semiannually, which Alton Aviation Consulting will review and confirm for reasonableness and achievability.
  • The senior maintenance reserve account, which is required to keep a balance to meet the higher of $1 million and (i) if prior to year seven, the projected maintenance expenses in the next five months of the transaction and (ii) if after year seven, the projected maintenance expenses in the next 12 months of the transaction.
  • The junior maintenance reserve, which, during the first two years of the transaction, sets aside projected maintenance expenses for the next 12 months and, during years three to seven of the transaction, sets aside projected maintenance expenses for the next 10 months. The deficiency in the maintenance account will be topped up from the waterfall. The excess maintenance over the required maintenance amount will be transferred to the waterfall.
  • The special reserve amount, which is an additional deposit at closing and will be used to pay for certain maintenance expenses related to MSN 1224.
  • The expense reserve account, which will be funded at closing from note proceeds with approximately $1.2 million that is expected to cover the next three months' expenses. These include the near-term transition costs associated with the aircraft on lease to Pegasus Airlines (MSN 40877) and the one off-lease aircraft (MSN 32659) on the closing date, plus an additional deposit, which will be used to cover the repayment of rent paid in advance with respect to two aircraft in the portfolio: MSN 4567 and MSN 35714.
  • The series C interest reserve account, which will be funded at closing from note proceeds of approximately $1.5 million and may be used to pay interest on the series C notes.
  • The initial lease rate of 1.17%, based on LMM of half-life values, as measured by the portfolio's weighted average lease rate factor based on aircraft half-life value. The rental rate associated with six of the aircraft leases is scheduled to reset to a lower rate during the term of the initial lease, resulting in a decline of the lease rate factor.
  • The senior indemnification (excluding indemnification amounts to lessees under leases entered into before the transaction closing date) is capped at $10 million and is modeled to occur in the first 12 months.
  • The junior indemnification (uncapped) is subordinated to the rated series' principal payment.
  • Merx Aviation, an aircraft lessor founded by Apollo Investment Corp. in 2012, is the servicer for this transaction.
  • The transaction's legal structure, which is expected to be bankruptcy remote.
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