Fitch revises Latam to stable

Fitch Ratings said it affirmed Latam Airlines Group SA's long-term foreign currency issuer default rating at B+.

In addition, the agency affirmed TAM SA's foreign and local currency issuer default ratings at B+ and its national long-term rating at A-(bra).

Latam’s and TAM's unsecured notes were also affirmed at B+/RR4.

The outlook was revised to stable from negative.

Fitch said the affirmations and outlook revision reflect expectations that improvement in the company's credit metrics will continue during 2017. Latam’s operational EBIT margin is expected to be around 6% in 2016, an improvement over a 5.1% in 2015.

During 2016, the company reached improvement in liquidity and significant reduction in fleet commitments. During 2017, its EBIT margin is likely to reach 6.5%, adjusted gross leverage 5.5 times, and liquidity (measured as cash and unused committed credit lines/latest 12 months (LTM) revenues ratio) should remain near 18%, Fitch explained.

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