S&P cuts Continental EETCs

Standard & Poor's said it lowered its ratings on selected enhanced equipment trust certificates (EETCs) of Continental Airlines Inc. (B/negative/B-3) as part of an industry-wide review of aircraft-backed debt.

S&P cut Continental's ETC pass-thru certificated series 1996-A to BB from BBB-, B to B from B+, C to B- from B, 1996-2A to BB from BBB-, 2B to B- from B+, 2C and 2D to CCC+ from B-, 1997-2B to CCC+ from B, 3A to BBB from BBB+, 3B to BB+ from BBB-, 1A to BB from BBB-, 1B to B- from B+, 1C-I and 1C-II to CCC+ from B, 2A to B- from BB-, 4A to BBB+ from A- and 4C to B+ from BB-.

Also, series 1998-1B to BB- from BB, 1C to B from B+, 3A-2 to A- from A, 3B to BB+ from BBB-, 3C-2 to B+ from BB-, series 1999-2A-2 to A- from A, series 2000-1A-2 to BBB+ from A, 1B to BB- from BB+, 1C-1 and 1C-2 to B+ from BB-, 2A-1 and 2A-2 to BBB from A- and A, 2B to BB- from BBB- and 2C to B+ from BB, series 2001-1A-1 to BBB+ from A- and 1A-2 to BBB+ from A, 1B to BB+ from BBB and 1C to B+ from BB- and series 2003-ERJ1-A to BB+ from BBB.

Floating enhanced aircraft trust 2000-A was cut to BBB- from BBB+ and 2000-B to B from B+.

Those and EETC ratings that were affirmed were removed from CreditWatch negative, where they were placed on Feb. 24.

The rating actions reflect S&P's concern that repayment prospects for holders of aircraft-backed debt could suffer in a potential scenario of further multiple bankruptcies of large U.S. airlines weakened by high fuel prices and intense price competition.

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