S&P Puts A, B Nts of Aircraft Deal APTT on Watch Neg.

Business Editors

July 9, 2002--Standard & Poor's said today that it placed its ratings on Airplanes Pass-Through Trust's class A and B notes on CreditWatch with negative implications, following continued weak cash flow, and a review of management's current projections for the forthcoming

The class C and D notes remain on CreditWatch with negative implications where they were placed on Sept. 27, 2001 (see list below).

Airplanes Pass-Through Trust is the largest aircraft operating lease securitization rated by Standard & Poor's, with 183 aircraft in the portfolio and approximately $2.71 billion of rated notes outstanding. The transaction closed in March 1996 and in March 1998 and March 2001 there were two re-financings of certain classes of notes.

"Prior to Sept. 11, 2001, Airplanes Pass-Through Trust suffered from somewhat poorer cash flow performance than was originally expected," said Irene Ho-Moore, Managing Director with Standard & Poor's Structured Finance Ratings group in London. "With current market trends in the aircraft industry, Standard & Poor's expects performance to be further affected. Renegotiated leases and rental resets have been the major cause of lower-than-assumed collections."

In addition, annual appraisal values for the past two years have come in under those assumed for this transaction. As a direct consequence of these lower appraisal values, income has been redirected to pay down the class A notes, effectively locking out any payments of principal on the class C and D notes. Given current cash performance, payments may soon be needed to maintain the required class A minimum principal payment schedule. These payments would rank senior in priority to payments on the class B, C, and D notes (interest and principal). Standard & Poor's will carry out further analysis in the coming weeks to ascertain the impact this would have on the current ratings on all notes in this transaction.

Airplanes Pass-Through Trust's aircraft portfolio includes a significant proportion of older planes, including Boeing 737-200s, various McDonnell Douglas aircraft, Fokker 100s, and certain turboprop regional aircraft. These have been particularly hard hit by events in the airline industry. Standard & Poor's expects to see lower lease rates realized on most of these aircraft, and some delay in re-leasing is also likely.

The ratings on the notes in this transaction and the CreditWatch situation will continue to be closely monitored.

RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS
Airplanes Pass-Through Trust
$2.637 Billion* Pass-Through Certificates
Class              Rating
          To                   From
A-6       AA/Watch Neg         AA
A-8       AA/Watch Neg         AA
A-9       AA/Watch Neg         AA
B         A/Watch Neg          A

RATINGS REMAINING ON CREDITWATCH WITH NEGATIVE IMPLICATIONS
Airplanes Pass-Through Trust
$775 Million* Pass-Through Certificates
Class     Rating
C         BB+/Watch Neg
D         B-/Watch Neg
*Initial outstanding amount of remaining classes.

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StructuredFinanceEurope@standardandpoors.com

Copyright 2002, Standard & Poor's Ratings Services