Moody's rates Nordic Aviation B2

Moody’s said it assigned B2 ratings to Nordic Aviation Capital DAC, its senior secured notes and senior secured term loan. The notes and the loan, expected to be $1.8 billion in total, will be issued through NAC Aviation 29 DAC. The company will also have an unrated $200 million senior secured revolving credit facility, which is guaranteed by NAC 29 and will rank ahead of the term debt.

“The ratings are assigned in anticipation that NAC will emerge from bankruptcy and issue the proposed debt in accordance with its confirmed bankruptcy plan in the very near term. The ratings will be withdrawn if the emergence and debt issuance do not occur in the very near term,” the agency said in a press release.

The B2 corporate family rating is based on an expected improvement in NAC’s capital and liquidity positions after it emerges from bankruptcy, which will provide robust buffers for execution risks associated with its ongoing business transformation.

However, “NAC's credit profile is limited by its weak though improving earnings prospects, which are still burdened by Covid-related credit quality deterioration, weaker than peer collection rates and high borrowing and restructuring costs,” Moody’s said.

The outlook is stable.

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