Fitch Rates GE Corporate Aircraft Financing LLC, Series 2003-1

Business Wire, Dec 23, 2003

Business Editors

CHICAGO--(BUSINESS WIRE)--Dec. 23, 2003

Fitch rates the GE Corporate Aircraft Financing LLC, Series 2003-1 (GE CAF 2003-1) $230,000,000 class A-1 notes 'AAA', the $72,000,000 class A-2 notes 'AAA', the $82,722,000 class A-3 notes 'AAA', and the $21,139,000 class B notes 'A'.

The $406 million of offered notes will be backed by loans originated or acquired by General Electric Capital Corporation (GECC) and secured by corporate aircraft. The GE CAF 2003-1 transaction represents GECC's inaugural corporate aircraft term asset-backed transaction and is the second term asset-backed transaction executed by the U.S. Equipment Finance (USEF) unit of GECC's Commercial Equipment Financing division.

The GE CAF 2003-1 ratings are based on:

-- Historical delinquency and loss performance of the selected

portfolio.

-- Origination, underwriting, and servicing experience and

procedures of GECC.

-- Role of GECC as servicer.

-- Obligor concentrations: the top one and top five obligors

within GE CAF 2003-1 are 5.61% and 21.77% of the initial pool

balance, respectively.

-- Of the initial pool balance, 74.70% contains balloon loans.

-- Other collateral pool characteristics including geographic

dispersion and corporate aircraft vintage.

-- Available credit enhancement for the class A and B notes.

-- Sound legal and cash flow structure of the transaction.

The class A ratings reflect credit enhancement provided by the subordination of the class B notes (5.00%), the class C notes (4.00%), the initial variable funding certificate (4.00%), available excess spread, and overcollateralization (OC) created by a partial turbo. The class B rating reflects credit enhancement provided by the class C notes, the variable funding certificate, available excess spread and OC.

The GE CAF 2003-1 $423 million underlying collateral pool consists of 113 contracts originated by the corporate aircraft group within GECC's Commercial Equipment Financing division. Aircraft types greater than 2% (as a percentage of the initial pool balance) include Jet (86.88%), Turbo Prop (10.68%), and Helicopter (2.16%). The top three aircraft vintage year concentrations are 1994-2000 (36.20%), 2001-2003 (33.05%), and 1985-1989 (11.84%). The overall pool has a weighted average seasoning of twelve months, and is diversified geographically, with the top five states as follows: Illinois (14.10%); California (13.69%); Pennsylvania (5.92%); New York (5.88%); and Connecticut (5.67%).

Credit enhancement was determined by running a series of scenarios for each class of notes through a cash flow model. The model reflects the securitization structure and was used to determine the break-even point of each class of notes. In consideration of the concentrations within the collateral pool, as well as the strong historical performance of GE's corporate aircraft portfolio, loan defaults and stresses were based on obligor and LTV concentrations. In addition, each stress scenario incorporated additional assumptions concerning default distribution, prepayments, recoveries and recovery lag times.

Under stress scenarios consistent with 'AAA' and 'A' ratings, the credit enhancement structure was sufficient to ensure payment of the class A and B notes by the legal maturity date.