Moody’s downgrades Turkish Airlines

Moody's Investors Service said it downgraded Turk Hava Yollari Anonim Ortakligi’s (Turkish Airlines) corporate family rating to Ba3 from Ba2 and probability of default rating to Ba3-PD from Ba2-PD.

The agency also downgraded Turkish Airlines' enhanced equipment trust certificates (EETCs): Bosphorus pass-through trust 2015-1A to Baa1 from A3, Anatolia pass-through trust 2015-1: class A to Baa1 from A3 and Anatolia pass-through trust 2015-1: class B to Ba1 from Baa3.

The outlook on the corporate and EETC ratings of Turkish Airlines is negative.

Moody’s said the downgrade of the corporate family rating and probability of default rating reflects the downgrade of Turkish Airlines' baseline credit assessment (BCA), a measure of its standalone credit profile, to b1 from ba3.

The downgrade of the BCA reflects: (a) The downward revision in our forecasts as a result of our expectation that Turkish Airlines' operating environment will remain weak entering into 2017; and (b) execution risks in the implementation of planned operational and strategic changes to address the currently challenging operating environment, the agency added.

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