S&P rates Allegiant Travel notes BB-

Standard & Poor’s said it assigned its BB- corporate credit rating to Allegiant Travel Co. and assigned a BB- issue-level and 4 recovery rating to Allegiant’s senior unsecured notes. The 4 recovery rating indicates an expectation that lenders would receive average recovery (30%-50%) in the event of a payment default.

S&P said the corporate credit rating on Allegiant reflects the company’s relatively small market share within the U.S. airline industry, with a focus on carrying leisure travelers from midsize cities to vacation destinations; the airline industry’s high risk and cyclical nature; and the company’s low operating cost structure.

The rating also incorporates the company’s financial profile, which, even with an increase in debt to acquire aircraft, will remain among the better of the rated U.S. airlines, the agency said.

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