Fitch downgrades VistaJet

Fitch Ratings said it downgraded VistaJet Group Holding Ltd.'s long-term issuer default rating to B- from B and removed it from Rating Watch negative.

The outlook is stable.

Fitch also said it downgraded the $300 million 7¾% notes due 2020 to B- with recovery rating of RR4 from B with recovery rating of RR4 and removed them from negative watch.

The notes are co-issued by VistaJet's 99.5%-owned subsidiaries, VistaJet Malta Finance plc and VistaJet Co Finance LLC, and are unconditionally and irrevocably guaranteed by VistaJet and its key subsidiaries, the agency said.

The downgrades were driven by lower-than-expected aircraft utilization and the effect of a depreciation of the euro to dollar in fiscal year 2015 on cash flows and aircraft yields, Fitch explained.

The stable outlook reflects VistaJet's reduced expansion plan and an expectation that this will allow the company to generate free cash flow and reduce leverage to less than 10x by 2018, the agency said.

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