S&P downgrades Gol Linhas

Standard & Poor’s said it downgraded Gol Linhas Aereas Inteligentes SA to B- from B on a global scale and to brB from brBB on a national scale.

The agency also said it affirmed the BB issue-level rating on the debt guaranteed by Delta Air Lines.

S&P also said it revised the recovery ratings on the company’s senior unsecured debt to 4L from 4H as a result of the increasing debt collateralized by shares of Gol Linhas’s frequent flier subsidiary, Smiles SA.

The outlook is stable.

The stable outlook reflects an expectation that the company’s recently improved liquidity and cost-cutting efforts should cushion it against weak market conditions in Brazil while the company gradually improves cash flow generation in the next few quarters, the agency said.

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