Fitch Ratings Downgrades Atlas Air EETCs

Business Wire,  Dec 16, 2002  

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Business Editors

NEW YORK--(BUSINESS WIRE)--Dec. 16, 2002

Fitch Ratings downgrades Atlas Air, Inc.'s enhanced equipment trust certificates (EETCs), series 2000-1, 1999-1 and 1998-1 as outlined below. All three series, with a combined current outstanding balance of $1.1 billion, remain on Rating Watch Negative.

The rating actions reflect Fitch's downgrade of Atlas Air, Inc.'s (Atlas) unsecured debt to as well as the deterioration in value of the subject collateral. On Dec. 6, 2002, Fitch's Corporate Finance group downgraded the unsecured debt ratings of Atlas Air, Inc. to 'CCC' from 'B'. The unsecured debt ratings remain on Rating Watch Negative. The EETC rating actions reflect Fitch's conclusion that the long term value of the Boeing 747-400F aircraft that support all three series has suffered some additional impairment since Fitch last downgraded Atlas Air EETCs on May 17, 2002. The EETC ratings remain on Rating Watch due to the pending resolution of the unsecured Rating Watch.

Global freight demand has improved some in the last 12 months. While a continued recovery in global air freight demand is possible, it is highly dependent on healthier economic conditions. The demand pickup has not and will likely not in the near future offset the global oversupply of freight aircraft. Accordingly, the market for freight aircraft has been and should continue to remain weak.

Fitch's EETC rating criteria relies on the credit quality of the underlying obligor and the loan to value of the aircraft collateral backstopping the transaction. EETC ratings are linked to the underlying obligor's credit quality. Atlas is a wholly-owned subsidiary of Atlas Air Worldwide Holdings, and is a provider of cargo capacity to major passenger airlines worldwide.

Ratings actions are outlined below:

Atlas Air 2000-1

--Class A downgraded to 'BBB- from 'A-';

--Class B downgraded to 'BB-' from 'BBB';

--Class C downgraded to 'B' from 'BB+';

--All classes remain on Rating Watch Negative.

Atlas Air 1999-1

--Class A-1 downgraded to 'BBB-' from 'A';

--Class A-2 downgraded to 'BBB-' from 'A';

--Class B downgraded to 'BB-' from 'BBB';

--Class C downgraded to 'B-' from 'BB-';

--All classes remain on Rating Watch Negative.

Atlas Air 1998-1

--Class A downgraded to 'BBB-' from 'A';

--Class B downgraded to 'BB-' from 'BBB';

--Class C downgraded to 'B' from 'BB';

--All classes remain on Rating Watch Negative.

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