Fitch: Latam outlook to negative

Fitch Ratings said it affirmed the BB foreign currency issuer default ratings and local currency issuer default ratings of Latam Airlines Group SA, TAM SA and TAM Linhas Aereas SA.

The agency simultaneously affirmed the Primera Clase Nive 2 (cl) equity rating of Latam and the A+ (bra) national scale ratings of TAM and TAM Linhas Aereas.

The outlooks were revised to negative from stable.

Fitch said the outlook revision reflects the high leverage of Latam versus its global peers within the rating category, as well as weak economic conditions in the region that will make it more difficult for the company to deleverage as quickly as anticipated.

The ratings of Latam and TAM and their subsidiaries take into account the credit linkage between the two companies, which stems from their legal, operational, and strategic ties, the agency said. These links are reflected in the existence of cross-guarantee and cross-default clauses related to the financing of aircraft acquisitions for both Latam and TAM.

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