S&P: Latam Airlines view to negative

Standard & Poor’s said it revised the outlook on Latam Airlines Group and TAM SA to negative from stable.

The agency also said it affirmed both companies’ global scale corporate credit ratings at BB.

S&P also said it lowered the national scale rating on TAM to brA+ from brAA.

The agency also affirmed the BB- rating on Latam’s and TAM’s senior unsecured debt.

The outlook revision reflects the weak airline market conditions in Brazil, S&P said.

The stagnant economy has led to overcapacity, lower demand for international flights and fewer corporate clients, reducing the company’s profitability, the agency said.

Furthermore, regional currency depreciations against the dollar have weakened Latam’s consolidated operations, lowering profitability, S&P added.

This scenario is expected to continue in 2016 because Brazilian economy is unlikely to recover in that year, the agency said.

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