Fitch drops Embraer to BB+

Fitch Ratings said it downgraded Embraer SA's long-term foreign- and local-currency issuer default rating to BB+ from BBB- and affirmed Embraer's national scale rating at AAA(bra).

Fitch removed the rating watch negative. The outlook is negative.

The agency also removed Embraer's unsecured bonds from rating watch positive and downgraded them to BB+ from BBB-. The bonds had been on positive watch pending the establishment of a commercial joint venture with the Boeing Co. Boeing terminated the agreement.

“The rating actions reflect the strong headwinds for the commercial aviation industry due to the coronavirus pandemic, which has resulted in a high level of aircraft deferrals, lower maintenance expenditures, and strong competition in the commercial and business jet market,” Fitch said in a press release.

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