Fitch gives British Airways certificates A-

Fitch Ratings said it assigned British Airways Pass-Through Trust 2020-1’s $763.5 million of class A certificates due November 2032 an A- rating.

“The A- rating reflects the limited headroom in the over-collateralization and a slow amortization schedule, which collectively result in the high loan-to-value (LTV) ratio at upper 90% until at least November 2023 under our A rating stress scenario,” Fitch said in a press release.

The airline plans to issue the equipment notes indirectly through an orphan trust special purpose entity that will own the collateral pool of 14 aircraft, four of which were old A320-200s delivered in 2009 and 2010 while the rest are new A320NEO, A350-1000 and B787-10 deliveries in 2020, and associated leases with British Airways. Fitch said some of the recent deliveries had been financed by British Airway’s $750 million bridge loan facility.

The proceeds and other funds will be used to repay the bridge loan and to finance more deliveries.

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