S&P reinstates American Airlines's certificates at BBB+

Standard & Poor's said it reinstated its rating on AMR Corp. unit American Airlines Inc.'s $85.7 million 2005-1 class G pass-through certificates that are insured by Financial Guaranty Insurance Co., assigning a BBB+ rating.

The agency said that the rating was suspended March 28, when it downgraded FGIC to a level below that of the confidential Standard & Poor's underlying rating.

The 2005-1 pass-through certificates are secured indirectly by spare engines used on a variety of planes in American's fleet and the transaction is structured in a manner similar to aircraft-backed enhanced equipment trust certificates, the agency said, adding that ratings on AMR and subsidiary American Airlines reflect participation in the competitive, cyclical and capital-intensive airline industry, a heavy debt and pension burden and substantial capital spending needs to modernize the airline's fleet.

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