Moody’s lowers Gol Linhas notes

Moody's Investors Service said it downgraded the ratings of Gol Linhas Aereas Inteligentes SA's debt, including Gol Finance's senior notes due in 2017 to Caa3 from Caa2, the perpetual notes guaranteed by Gol to C from Caa2 and the corporate family rating to Caa3 from Caa1.

The outlooks remain negative.

The agency also affirmed the foreign currency rating assigned to Gol LuxCo SA's term loan guaranteed by Delta Air Lines, Inc. at Baa3; outlook stable.

Moody’s said the downgrade follows Gol's announcement that its subsidiary Gol LuxCo has initiated a private exchange offer for roughly $782 million in debt outstanding including the senior unsecured notes due in 2017, in 2020 and the perpetual notes issued by Gol Finance, along with the senior unsecured due in 2022 and in 2023 issued by LuxCo.

The agency views this transaction as a distressed exchange given that the new package of securities and assets offered amount to a materially lower financial obligation relative to its original promise, with the effect of allowing the issuer to avoid a Moody's default event.

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