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S&P affirms Continental Airlines
Standard & Poor's said it affirmed the B corporate credit rating on Continental Airlines Inc., based on the view of the credit quality of a consolidated United Continental Holdings Inc., which will own Continental and United Air Lines.
The agency removed all ratings from CreditWatch, where they were placed on May 3.
"Our affirmation of our B [corporate credit rating] on Continental is based on our evaluation of the consolidated credit quality of UCHI, which Continental and UAL Corp. will form upon a merger that they hope to close on Oct. 1, 2010," S&P analyst Philip Baggaley said in a statement.
"We expect that UHCI, helped by much improved earnings at both Continental and United this year, should generate fully adjusted EBITDA interest coverage of around 2x and funds flow to debt in the low-teens percent range over the next several years. We characterize Continental's business risk profile (based on the consolidated credit profile of UCHI) as weak and its financial profile as highly leveraged."
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