S&P cuts Aeromexico

S&P said it lowered its issuer credit and issue-level ratings on Grupo Aeromexico, SAB de CV to D from B- the day after the company and certain of its subsidiaries and affiliates filed for bankruptcy under Chapter 11 in New York.

“They did so in order to address the restructuring of Aeromexico’s capital structure and resize its business model to adapt to post-Covid-19 growth prospects. The company aims to restructure its debt and lease liabilities by entering into a restructuring support agreement with most of its creditors to withstand the effects of current economic downturn,” S&P said in a press release.

Aeromexico will continue to operate using its permits and concessions throughout this process, S&P said.

“We believe the company will probably be flying only at 50% of its capacity towards the end of the year. Therefore, the company will continue seeking extraordinary sources of liquidity, which together with its current available cash, will support the business during reorganization proceedings,” S&P said.

The agency also revised the recovery rating on Aerovias de Mexico, SA de CV’s $400 million of senior unsecured notes due 2025 to 6 from 4, indicating S&P’s expectation of a negligible recovery (0%-10%) for lenders in the event of a default.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.