Fitch Affirms and Downgrades Various Classes of Blade Engine Securitization Ltd

Fitch Ratings has affirmed and downgraded Blade Engine Securitization LTD. as outlined below:

--Series A-1 affirmed at 'BBBsf'; Outlook to Negative from Stable;

--Series A-2 affirmed at 'BBBsf'; Outlook to Negative from Stable;

--Series B downgraded to 'Bsf' from 'BBsf'; Outlook Negative;

--Series E is not rated by Fitch.

KEY RATING DRIVERS

Fitch's affirmation of the series A notes reflect the recent stable performance and the ability to pass certain stressed scenarios. The Negative Outlook reflects the slowly increasing loan to value (LTV) and the future lease cash flow potential of the engine portfolio. The transaction is becoming increasingly dependent on a few engines that support wide-body aircraft with a weakened demand profile.

The downgrade of the series B notes to 'Bsf' is the result of the weakening asset quality. As a result, the class only received principal following engines sales since August 2014, accelerating the growth of the LTV. Additionally, the Junior Cash Account has been continuously drawn upon in order to pay timely interest. The class remains on Outlook Negative over concerns regarding the ability of the engines to generate sufficient cash flow to replenish the JCA and resume principal payments.

RATING SENSITIVITIES

Due to the correlation between global economic conditions and the airline industry, the ratings may be impacted by the strength of the macro-environment over the remaining term of the transaction. Global economic scenarios that are inconsistent with Fitch's expectations could lead to further negative rating actions. For example, the occurrence of an extended global recession of significantly greater severity than the last two experienced, and the resulting strain on aircraft lease cash flow, could lead to a downgrade of the notes.

Additionally, changes in the airline industry can have significant impact on the ratings of this transaction. If the timing of or degree of technological advancement in the commercial aviation space differs materially from Fitch's expectations, a rating movement may occur. Similarly, factors influencing the supply and demand for the engines in the trust's portfolio could directly impact Fitch's view of the transaction.

DUE DILIGENCE USAGE

No third-party due diligence was received in connection to this review.

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

Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 19 Dec 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=838868

Criteria for Servicing Continuity Risk in Structured Finance (pub. 17 Dec 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=875586

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. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=999134

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=999134

Endorsement Policy

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

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