Fitch: Gol Linhas notes B-

Fitch Ratings said it assigned an expected rating of B- with a recovery rating of RR4 to Gol Linhas Aereas Inteligentes SA’s proposed senior unsecured notes.

These notes will be issued through wholly owned subsidiary Gol LuxCo SA and will be unconditionally guaranteed by Gol Linhas Aereas, Fitch said.

The target amount of the proposed issuance is in the range of $350 million to $500 million and the final issuance size will depend upon market conditions, the agency said.

Gol Linhas Aereas also has foreign- and local-currency long-term issuer default ratings of B-, long-term national rating of BBB-(bra) and a B- rating with recovery rating of 4 on its $200 million perpetual bonds.

VRG Linhas Aereas SA has a foreign- and local-currency long-term issuer default ratings of B-, long-term national rating of BBB-(bra) and BBB-(bra) rating on its R$500 million of local debentures due 2017.

Gol LuxCo SA has a B- rating on its $200 million of senior notes due 2023.

GOL Finance has a B- ratings with recovery ratings of RR4 on its $225 million of senior notes due 2017 and $300 million of senior notes due 2020.

The proceeds from the proposed issuance will be used to refinance existing debt as part of a tender offer recently announced by the company, Fitch said.

The ratings reflect the company’s high leverage and the sensitivity of Gol Linhas’ financial performance to several factors not controlled by the company such as competition, devaluation of the local currency versus the U.S. dollar and fuel cost, the agency said.

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