S&P downgrades gategroup to B+

S&P said it lowered its long-term corporate credit rating on gategroup Holding AG to B+ from BB-.

S&P said the downgrade follows the announcement that HNA Group has finalized the acquisition of gategroup.

The agency now apples its group rating methodology to the HNA Group, and it assesses the creditworthiness of the combined diversified but highly leveraged HNA Group to be commensurate with a b+ group credit profile (GCP).

Under its group rating methodology, S&P said it generally does not rate a subsidiary higher than the GCP, even if the stand-alone credit profile (SACP) of the subsidiary is higher than the GCP. This is mainly because in its view, the weaker parent could divert assets from its subsidiary or burden it with liabilities during periods of financial stress.

In addition, S&P said the subsidiary's flexibility with regard to raising debt and capital could also be significantly reduced.

The agency considers gategroup to be a moderately strategic subsidiary of the HNA Group because it provides backward integration to its airline businesses and complements its other at-airport services subsidiaries.

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