Fitch Ratings Downgrades Aviation Capital Group Trusts II & III

Fitch Ratings has taken the following rating actions the Aviation Capital Group Trusts as outlined below:

Aviation Capital Group Trust II (ACG II)

--Class B-1 notes downgraded to 'BBB-' from 'BBB'.

Aviation Capital Group Trust III (ACG III)

--Class G-1 notes downgraded to 'A' from 'AA-';

--Class B-1 notes downgraded to 'A-' from 'A';

--Class C-1 notes affirmed at 'BBB'.

In addition, all classes are assigned a Stable Outlook.

The analysis of ACG II & III is consistent with Fitch Rating's updated criteria published today titled 'Global Rating Criteria for Aircraft Operating Lease ABS'. The primary changes to the criteria include the introduction of a 'A' rating cap and revisions to certain stress assumptions used in cash flow modeling scenarios. These criteria changes impacted the ratings to ACG II & III as detailed below.

Under Fitch's 'BBB' rating scenario as described in the updated criteria, the class B-1 notes in ACG II are unable to support full payments of principal and interest as dictated by the transaction documents. Fitch's modeling approach considered the concentration of less marketable aircraft in the portfolio, such as the Boeing 737-300/400. Additionally, recent performance has moderately deteriorated as monthly collections net of expenses have slightly declined over the past year.

The downgrade to the class G-1 notes in ACG III is reflective of the introduction of the rating cap of 'A' for aircraft operating lease ABS. The downgrade to the class B-1 notes represents the inability of the structure to support the full payment of the class B notes under Fitch's 'A' rating scenario. Please refer to 'Global Rating Criteria for Aircraft Operating Lease ABS' for more detail on the 'A' rating cap and stress assumptions.

Expected performance of the collateral pool in ACG III is consistent with the current rating on the class C-1 notes.

Fitch's analysis involved forecasting the expected lease cash flow to be available to service debt over the remaining life of the transaction. The expected cash flow takes several factors into account, including aircraft age, value, Fitch's expectations for the commercial aviation industry, remarketing expenses and downtime, and perceived liquidity of the aircraft in the portfolio to determine future lease expectations, consistent with the analysis described in Fitch's criteria.

Applicable Criteria available on Fitch's web site at www.fitchratings.com: 'Global Rating Criteria for Aircraft Operating Lease ABS', dated March 31, 2010, and 'Global Structured Finance Rating Criteria', dated Sept.30, 2009.

Additional information is available at www.fitchratings.com.

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Contacts:

Fitch Ratings, Chicago
Bradley Sohl, [phone]
Peter Manofsky, [phone]
or
Sandro Scenga, [phone]
(Media Relations, New York)
[e-mail]