Aircraft ABS has had a difficult week, with Moody's Investors Services doling out downgrades on 23 classes in four separate transactions.

The actions affected Embarcadero Aircraft Securitization Trust, Aircraft Lease Portfolio Securitization Trust, Aerco Limited Trust and Airplanes Pass Through Trust.  In a release, the rating agency cited low lease rates for older planes and the declining value of legacy aircrafts relative to thier newer generation counterparts as the primary culprits behind the downgrades seen in these deals.

The Alps transaction relies on the sale of aircraft as the primary mode of principal retirement. Higher than expected maintenance payments have negatively impacted the cash flow in the structure. While the current value of the aircraft should be sufficient to fully retire the Class A notes, current market conditions may make it difficult to sell the aircraft in the portfolio at better than highly distressed prices in time for the final maturity of the transaction in June 2006, Moody's analysts said.

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