Fitch rates Gol bonds BB-

Fitch Ratings said it assigned an expected rating of BB- to Gol Linhas Aereas Inteligentes SA's (BB-) proposed perpetual bonds. The notes will be issued through Gol's wholly owned subsidiary, VRG Linhas Aereas SA, and will be unconditionally guaranteed by Gol.

The target amount of the proposed issuance is $100 million to $150 million.

The outlook is stable.

Proceeds will be used to refinance debt and for general corporate purposes.

Gol's ratings reflect the company's significant market share position in the Brazilian airline sector and its business strategy of focusing its operations primarily on the Brazilian domestic market, the agency said.

The company is exposed to fuel cost volatility and other industry-related risks, such as revenue volatility, high operating leverage and increasing competition, the agency noted.

The ratings incorporate the high degree of sensitivity of Gol's operations to changes in the macroeconomic scenario, Fitch said.

Fitch said it expects to see further deterioration in the company's net leverage during fourth quarter 2011, reaching levels of around 9.0 times by the end of December 2011.

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