Originally Posted by
Excargodog
Well, this:
https://www.fitchratings.com/researc...-bb-27-10-2021
You sell pass through trust certificates rather than bonds because these certificates collateral ( in this case
21 A321 NEOs and 5 ERJ 175s) can go directly to the purchasers in the event of a bankruptcy and don’t risk taking a haircut like other asset classes. They way you can borrow money at a little lower ate than you would otherwise need from a straight junk bond sale.
From the Fitch Rating ‘definitions’ page:
So in effect the market has stopped lending money to AAG without direct collateral, and even then it is not considered investment grade, but speculative.