S&P revises Gogo to positive

S&P said it revised the outlook for Gogo Inc. to positive from stable and affirmed all its ratings, including the CCC+ rating on its convertible notes due on May 16.

“We believe there is a high probability that the remaining $103 million of convertible notes will be settled in stock before May 15, providing a clear path to an upgrade. The 2022 convertible notes have a conversion rate that equates to $6 per share of common stock. Gogo's stock is currently trading at about $17 per share as of March 16, 2022. In November 2021, Gogo informed the trustee under the indenture governing the notes that it intends to settle any conversion of the notes in shares of common stock,” S&P said in a press release.

“We believe there is significant opportunity to increase earnings and cash flow in 2023 and beyond. Increasing aircraft online coupled with rising data usage will likely result in robust revenue growth for the foreseeable future. Data consumption is up 78% from 2019 levels and flights per day are up 29%, and we expect these trends to continue,” the agency said.

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