No rating change on Genesis after Ecuador lease amendment

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An amendment that allows two Airbus A319 aircraft to be leased into Ecuador, a "prohibited country" since 2006 under the Genesis Funding transaction, will not impact the ratings on the financing, says Moody's Investors Service.

AerCap, the servicier of the financing, was granted permission to place two A319s (MSNs 0946 and 0949) with lessees in Ecuador until February 2019 and April 2018, respectively.

"This decision to allow aircraft will not result in a reduction, withdrawal, or placement under review for possible downgrade of the ratings currently assigned to the series 2006-1 notes, issued by Genesis Funding," says Moody's

Ecuador's legal system provides "very limited comfort" with respect to protection of the interests of foreign investors; however, the ratings agency notes that the change in classification for Ecuador is for a "specific" aircraft.

In addition, the aircraft leased within Ecuador accounts for a small percentage of the underlying pool of assets; approximately 3.6% based on the most recent average appraised base value.

Furthermore, the amendment will allow AerCap to extend the lease of MSN 946 to TAME Línea Aerea del Ecuador and the lessor has been leasing aircraft to the carrier since 2008, says Moody's.

Moody's did not express an opinion as to whether the amendment could have other, non credit-related effects.