OREANDA-NEWS. Fitch Ratings has assigned the following expected ratings to the Spirit Airlines. Inc. (SAVE, rated 'BB+'; Outlook Stable by Fitch) proposed pass through trusts series 2015-1:

--\\$455.6 million class A certificates due in April 2028; 'A(EXP)';
--\\$121 million class B certificates due in April 2024; 'BBB+(EXP)'.

New Issue Report:
Fitch will also publish a new issue report, which will be available at www.fitchratings.com.

KEY RATING DRIVERS
The A-tranche ratings are primarily driven by a top-down analysis incorporating a series of stress tests which simulate the rejection and repossession of the aircraft in a severe aviation downturn. The 'A' level rating is supported by a high level of overcollateralization (OC) and high quality collateral which support Fitch's expectations that A tranche holders should receive full principal recovery prior to default even in a harsh stress scenario. The ratings are also supported by the inclusion of an 18-month liquidity facility, cross-collateralization/cross-default features and the legal protection afforded by Section 1110 of the U.S. bankruptcy code. The structural features increase the likelihood that the class A certificates could avoid default (i.e. achieve full recovery prior to the expiration of the liquidity facility) even if Spirit were to file bankruptcy and subsequently reject the aircraft.

The initial A-tranche loan to value (LTV), as cited in the prospectus, is 54%, and Fitch's maximum stress case LTV (the primary driver for the A-tranche rating) through the life of the transaction is 86%. This level of OC provides a significant amount of protection for the A-tranche holders.

The rating of 'BBB+' for the B tranche is reached by notching up from Spirit's Issuer Default Rating (IDR) of 'BB+'. Fitch notches subordinated tranche ratings from the airline IDR based on three primary variables; 1) the affirmation factor (0-2 notches for issuers in the 'BB' category), 2) the presence of a liquidity facility, (0-1 notch), and 3) recovery prospects. In this case, Fitch has applied a three-notch uplift consisting of a high affirmation factor (+2 notches) (as discussed below) and a one-notch uplift reflecting presence of the liquidity facility.

Transaction Overview
Spirit plans to raise \\$576.6 million in an EETC transaction to finance 15 new delivery aircraft.

The A-tranche will be sized at \\$455,622,000 with a 12.6-year tenor, a weighted average life of 8.6 years and an initial LTV of 54% (per the prospectus). Fitch calculates the initial LTV at 56.3% using values provided by an independent appraiser.

The subordinate B-tranche will be sized at \\$120,959,000 with an 8.6-year tenor and a weighted average life of 5.5 years. The initial prospectus LTV for the B-tranche is 66.7%. Fitch calculates the initial LTV at 69.6%.

Collateral Pool: The transaction will be secured by a perfected first-priority security interest in 15 new delivery aircraft including 12 Airbus A321-200s and 3 A320-200s. Fitch classifies both the A321 and the A320 to be solid Tier 1 aircraft. The A321s in this pool will feature a maximum take-off weight (MTOW) of 205k lbs, which is above average for the aircraft type, which typically features an MTOW of between 196.2k and 206.1k lbs. The higher MTOW allows for either a higher payload or longer range, increasing the aircraft's utility. All collateral aircraft will be delivered with fuel-saving sharklets, which adds to the value planes. The collateral aircraft will also feature Airbus' 'SpaceFlex' option, a lavatory and galley configuration that will allow the aircraft to accommodate even higher density configurations. This will be a pre-funded transaction. The collateral aircraft are scheduled for delivery between October of 2015 and December of 2016.

Liquidity Facility: The class A and class B certificates benefit from a dedicated 18-month liquidity facility which will be provided by Natixis (rated 'A'/'F1' with a Stable Outlook).

Stress Case: The ratings for the class A certificates are primarily based on collateral coverage in a stress scenario. The analysis utilizes a top-down approach assuming a rejection of the entire pool in a severe global aviation downturn. The analysis incorporates a full draw on the liquidity facility, and an assumed repossession/remarketing cost of 5% of the total portfolio value. Fitch then applies immediate haircuts to the collateral value.

Fitch applies a value haircut of 25% to both the A320 and A321, representing the mid-point of its Tier 1 stress range of 20-30%. Fitch considers a 25% value haircut to be appropriate and potentially conservative for both models given their popularity among operators, their large fleets of existing aircraft spread across many users, and by strong backlogs, which support their values going forward.

These assumptions produce a maximum stress LTV of 86% through the life of the deal. This would imply full recovery for the senior tranche holders in what Fitch considers to be a harsh stress scenario.

Affirmation Factor:
As the aircraft featured in this collateral pool will make up a sizeable portion of Spirit's total fleet, Fitch considers the affirmation factor for this transaction to be high. The 15 aircraft in the pool will make up roughly 16% of Spirit's operating fleet and around 50% of its owned aircraft (Spirit has, until recently, leased all of its planes). Even as Spirit grows, this pool will continue to make up an important part of its fleet. The company's current order book will push the total fleet size to around 144 aircraft by 2021, meaning that the pool collateral will still represent nearly 10% of the fleet in six years. These aircraft will also, in the near term, represent the youngest and most fuel efficient in the company's fleet.

B-Tranche Ratings:
Fitch notches subordinated tranche ratings from the airline IDR based on three primary variables; 1) the affirmation factor (0-3 notches for airlines with 'B' category ratings and 0-2 notches for airlines with 'BB' category ratings), 2) the presence of a liquidity facility, (0-1 notch) 3) recovery prospects.

In this case, the collateral pool supports a three notch uplift. Fitch considers the affirmation factor for the transaction to be high as discussed above (+2 notches). A one notch uplift is also warranted reflecting the presence of a liquidity facility.

Spirit Airlines Corporate Rating:
Fitch recently published an IDR of 'BB+' for Spirit Airlines. The rating is supported by Spirit's industry-leading operating margins, healthy liquidity, low cost structure, and modest leverage. Fitch believes that Spirit's cost advantage over its peers gives the company significant cushion to operate through potential future economic downturns while maintaining adequate financial health. The ratings are also supported by Spirit's track record of successful growth achieved in the years since the previous recession, which partly offsets Fitch's concerns about the company's plans for future growth. For more information, see the full press release at www.fitchratings.com.

KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the SAVE 2015-1 class A certificates include:
--A top down scenario in which the collateral aircraft are rejected in a global aviation downturn;
--Collateral value stresses of 25% for both the A320 and A321;
--Annual collateral depreciation rates of 5%;
--Full 18 month liquidity facility draw along with an assumed remarketing/repossession cost of 5% of the collateral value.

Key assumptions for the class B certificates include:
--A high affirmation factor that effectively reduces the probability of default for the certificates.

RATING SENSITIVITIES
Senior tranche ratings are primarily based on a top-down analysis based on the value of the collateral. Therefore, a negative rating action could be driven by an unexpected decline in collateral values. A320 family values could be impacted by the entrance of the A320neo or an unexpected and severe global aviation downturn. Fitch does not expect to upgrade the senior tranche ratings above the 'A' level in the near term.

The ratings of the subordinated tranches are influenced by Fitch's view of Spirit's corporate credit profile. A negative rating action could be considered if Spirit's credit profile weakens in Fitch's view. Fitch expects there to be some ratings compression on the subordinate tranches as the airline IDR moves up the rating scale. Therefore, if Spirit were upgraded to 'BBB-' the B tranche would likely remain at 'BBB+'.

FULL LIST OF RATING ACTIONS

Fitch has assigned the following expected ratings;

Spirit Airlines Pass Through Trust Certificates, Series 2015-1
--Class A certificates 'A (EXP)';
--Class B certificates 'BBB+ (EXP).

Fitch currently rates Spirit Airlines as follows:

Spirit Airlines, Inc.
--Issuer Default Rating 'BB+'.