Moody’s rates Allegiant Travel notes B1

Moody's Investors Service said it affirmed the Ba3 corporate family and Ba3-PD probability of default ratings assigned to Allegiant Travel Co.

The agency also assigned a B1 rating (77-LGD5) to the company's planned new $300 million of senior unsecured notes due 2019 and affirmed the SGL-2 speculative grade liquidity rating.

The outlook is stable.

Moody's withdrew the Ba3 rating on the $125 million term loan facility as that facility has been repaid.

The company plans to use the proceeds of the new notes for general corporate purposes. This will include funding purchases of Airbus narrow-body aircraft and, the agency believes, share repurchases or dividends.

Moody’s said the combination of the new $300 million of unsecured notes and almost $200 million of incremental amortizing term loans secured by the majority of the company's owned assets will significantly increase funded debt. However, the agency expects credit metrics to remain aligned with levels found at lower investment grade-rated companies.

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