S&P lifts Embraer

S&P said it raised its ratings on Embraer SA and its senior unsecured notes to BB+ from BB. The agency revised the recovery rating on the notes to 3 from 4, citing lower debt levels.

“The company's operations have been recovering in the past two years after the drastic hit amid the pandemic in 2020. Aircraft deliveries are gradually increasing, with a solid backlog in both the executive and commercial business units that totals $17.8 billion as of September 2022. In addition, aftermarket revenues have been representing more of total revenues amid increasing deliveries,” S&P said in a press release.

The agency estimates that in 2022, Embraer had a debt to EBITDA of about 2.5x in 2022 and this ratio will fall to around or below 2x in 2023, in line with the company’s leverage target.

The outlook is stable.

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