S&P assigns 3 recovery rating to Qantas debt

Standard & Poor's said it affirmed the BB+ long-term issue rating on Qantas Airways Ltd.'s senior unsecured debt, in line with the corporate credit rating.

The agency also said it assigned a recovery rating of 3, indicating 50% to 70% expected default recovery.

S&P also said it removed the senior unsecured debt from CreditWatch with negative implications, where it was placed in December.

Supporting the issue and recovery ratings is a valuation of Qantas Airways as a going concern in a hypothetical default scenario, the agency said.

The ratings reflect the airline's leading domestic market position, the enduring value of the Qantas brand and an assessment that the business would retain more value as a reorganized operating entity than in liquidation, S&P said.

The agency said Qantas is vulnerable to adverse industry conditions, such as persistently weak economic conditions, escalated fuel prices and external shocks.

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