Fitch downgrades GOL

Fitch Ratings said it downgraded GOL Linhas Aereas Inteligentes SA's long-term foreign- and local-currency issuer default ratings to C from B- with a negative outlook. Fitch also lowered GOL Finance Inc.'s unsecured bonds to C from B-/RR4, as well as GOL's long-term national scale rating to C(bra) from BB+(bra) with a negative outlook.

“The downgrades follow GOL's announcement of a new financing commitment from Abra Group Ltd., a new holding company established to control the operations of GOL and Avianca Group. Fitch considers the new financing to be a distressed debt exchange (DDE) as per its criteria. The proposed refinancing would result in a material reduction in terms of structural subordination and through the elimination of some restrictive covenants for bondholders that do not accept the deal,” Fitch said in a press release.

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