KBRA releases a research report examining exposure to China in its rated universe of aviation asset-backed securities (ABS) transactions. In August, the White House announced an executive order prohibiting certain investments in China in sensitive technologies that could threaten the national security of the U.S., such as semiconductors, microelectronics, and artificial intelligence. While the bans are focused on the technology sector, they are among the latest escalations of geopolitical issues between the U.S. and China, with the potential to expand to other industries should tensions mount. While we are hopeful this does not occur—and do not foresee such actions—it prompted us to assess China exposure across our rated universe of over 50 aviation ABS transactions.

The report shows the percentage of the portfolio value to lessees that are located in China, based on data used from the September 2023 payment date reports.

Click here to view the report.

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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