Kroll Bond Rating Agency Assigns Final Ratings to Emerald Aviation Finance Limited, Series 2013-1

Business Wire


Kroll Bond Rating Agency (“KBRA”) announces the final ratings to two classes of notes issued by Emerald Aviation Finance Limited (“Emerald”). The notes are newly issued asset-backed securities related to a portfolio of aircraft assets and related leases.

The Series 2013-1 notes issued by Emerald represent Avolon Aerospace Leasing Limited’s (“Avolon”, or the “Company”) inaugural securitization under Rule 144A of the Securities Act. The notes issued by Emerald will be supported by a portfolio of 20 aircraft, initially leased to 15 commercial airlines located in 14 countries. The final ratings reflect initial credit enhancement comprised of overcollateralization (approximately 34% for the Class A-1 notes and approximately 23% for the Class B-1 notes), subordination of a junior note class for Class A-1 noteholders, a maintenance reserve account, as well as a liquidity facility provided by BNP Paribas S.A. sized at closing to 9-months of interest payments on both note classes plus $12.0 million.

KBRA views Avolon as a strong aircraft leasing company with the capabilities to remarket, maintain and repossess the aircraft in the Emerald portfolio over the life of the transaction. The Company was founded in May 2010 by a highly experienced management team that has worked together and built two successful aircraft leasing businesses, including RBS Aviation Capital. Since its inception, Avolon has built a diversified portfolio of 95 owned and managed aircraft with 76 deliveries scheduled between 2014 and 2021. As of June 30, 2013, the Company has aircraft on-lease to 36 airlines located in 24 countries.

KBRA analyzed the transaction using the General Rating Methodology for Asset-Backed Securities published on July 30, 2012. The Emerald transaction falls within Category 2 – Operating Assets which includes transactions that are typically backed by pools of short-term loans or leases on long-lived assets. KBRA conducted an on-site operational review of Avolon at its Dublin, Ireland headquarters in September 2013 and reviewed the operative agreements and legal opinions for the transaction.

For complete details on the analysis, please see KBRA’s Pre-Sale Report, “Emerald Aviation Finance Limited, Series 2013-1”, which was published September 26, 2013 at

Final Ratings Assigned: Emerald Aviation Finance Limited, Series 2013-1

Class         Rating         Initial Principal Balance
A-1         A(sf)         $546,000,000
B-1         BBB(sf)         $90,210,000

17g-7 Disclosure:

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report: Emerald Aviation Finance Limited, Series 2013-1 17g-7 Disclosure Report.

Related Publications:

General Rating Methodology for Asset-Backed Securities

About Kroll Bond Rating Agency

KBRA was established in 2010 by Jules Kroll to restore trust in credit ratings by creating new standards for assessing risk and by offering accurate, clear and transparent ratings. KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (“NRSRO”). In addition, KBRA is recognized by the National Association of Insurance Commissioners (“NAIC”) as a Credit Rating Provider (“CRP”).

Anthony Nocera, 646-731-2350
Brian Ford, 646-731-2329
Patrick McShane, 646-731-2376


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