S&P cuts Latam Airlines certificates

S&P said it lowered Latam Airlines Group SA’s EETC-2015 1 class A notes to CCC(sf) from CCC+(sf) and affirmed the CCC-(sf) rating on the class B notes.

“Following the aircraft rejection and agreement with the trustee on their repossession, ratings on the certificates are now based exclusively on collateral values and ability to sell all aircraft before drawing down the transaction liquidity facility, which still should cover the next three interest payments (until Nov. 15, 2021),” S&P said in a press release.

The agency noted no aircraft have been sold and continues to see a drop in aircraft appraisals. “However, we note that aircraft that collateralize the EETCs are modern and widely used models (A321-200, A350-900, and 787-9), for which values haven’t dropped as steeply as those of older or less popular types of aircraft,” the agency said.

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