S&P lowers Sabre

S&P said it lowered the issuer credit rating on Sabre Corp. to BB- from BB and the issue-level ratings to BB- from BB and removed all ratings from CreditWatch, where they were placed Feb. 26 with negative implications.

S&P also revised its view of the company's liquidity to adequate from strong as the effect from the coronavirus would cause the company's covenant cushion to shrink over the next 12 months.

“The downgrade reflects our view that Sabre's adjusted net leverage will increase above 6x in 2020 from 4.1x in 2019 due to the company's planned $150 million of incremental technology spending and the expected declines in travel volume related to the coronavirus,” S&P said in a news release.

Additionally, Sabre's leverage could exceed S&P’s forecast by about 0.5x in 2020 and 2021 if the company receives regulatory approval on its pending acquisition of Farelogix. Although Farelogix would likely support Sabre's long-term growth, the business generates minimal EBITDA, S&P said.

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