Moody's rates Gol Linhas Aereas bonds Ba2

Moody's Investors Service said it assigned a Ba2 foreign currency debt rating to the proposed $250 million guaranteed senior unsecured perpetual bonds to be issued by Gol Finance, an offshore subsidiary of Brazil-based Gol Linhas Aereas Inteligentes SA. The agency also assigned a Ba2 global local currency corporate family rating to Gol. The outlook is stable.

Proceeds from bond offering will be used primarily for aircraft acquisitions.

Moody's said the ratings assigned reflect Gol's position as one of only three major passenger airlines operating within Brazil. Gol's operating history has been marked by strong growth and consistent profitability. Its revenues have benefited from its ability to attract market share by keeping domestic fares about 25% to 35% lower than its competitors, as well as stable economic conditions that have encouraged business travel and a broader acceptance of airlines as a means of interstate transport.

The ratings also reflect the company's low non-fuel operating cost structure, its prospects for maintaining revenue growth while undergoing a major capacity expansion, its limited operating history which has not coincided as yet with a prolonged business downturn, its strong market position and its exposure to currency fluctuations against dollar, the agency said.

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