Fitch rates Latam notes B+

Fitch Ratings said it assigned an expected rating of B+ with recovery rating of RR4 to Latam Airlines Group SA's proposed unsecured notes, which will be issued through its fully owned subsidiary Latam Finance Ltd.

The notes will be fully guaranteed by Latam and the target amount for the proposed transaction is $500 million, Fitch said.

The total amount and tenor for the proposed issuance will depend on market conditions, the agency said.

The proceeds will be used primarily to refinance debt and for general corporate purposes, Fitch said.

Latam also has a long-term issuer default rating of B+ with a negative outlook.

The negative outlook considers the company’s weaker-than-expected consolidated operational performance during 2015, the agency said.

Fitch said it expects the company's key credit metrics will remain pressured in 2016 through 2017.

Prevailing unfavorable economic conditions in Latin America, particularly in Brazil, will make it more difficult for the company to execute de-leveraging through 2017, the agency said.

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