Fitch downgrades Latam

Fitch Ratings said it downgraded Latam Airlines Group SA’s foreign-currency issuer default rating to BB- from BB.

Fitch also said it downgraded TAM SA’s foreign- and local-currency issuer default ratings to BB- from BB and its national long-term rating to A(bra) from A+(bra).

The outlook is stable.

The downgrades reflect the review of Latam’s operational performance, Fitch said, as well as expectations for the next 24 months ending in December 2016.

The downgrades also incorporate a review of Latam’s credit metrics versus its global peers within the rating category, the agency said.

The ratings consider the company’s diversified business model, strong regional market position, high gross adjusted leverage and adequate liquidity, Fitch said.

The ratings also incorporate the company’s solid business position in the domestic and international Brazilian market, as well as the volatility in the operational results, the agency said.

Also downgraded includes Tam Linhas Aereas SA’s long-term issuer default rating to BB- from BB, local-currency issuer default rating to BB- from BB and national long-term rating to A(bra) from A+(bra).

The rating on Tam Capital Inc.’s $300 million senior unsecured notes due 2017 also was downgraded to BB- from BB, along with the rating on Tam Capital Inc. 2’s $300 million senior unsecured note due to 2020 to BB- from BB.

The rating on Tam Capital Inc. 3’s $500 million senior unsecured note due 2021 also was downgraded to BB- from BB.

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