Fitch rates Avianca notes B+

Fitch Ratings said it assigned a long-term issuer default rating of BB- to Avianca Holdings SA, along with a long-term local-currency issuer default rating of BB-.

Aerovias del Continente Americano SA also was assigned a long-term issuer default rating of BB- and long-term local-currency issuer default rating of BB-.

Grupo Taca Holdings Ltd. was assigned a long-term issuer default rating of BB- and Avianca Leasing LLC has a long-term issuer default rating of BB-.

The outlook is stable.

Fitch also said it assigned an expected senior unsecured rating of B+ with a recovery rating of RR5 to the proposed issuance of $300 million of notes to be issued by Avianca Holdings and its subsidiaries, Grupo Taca Holdings and Avianca Leasing.

Avianca Holdings, Grupo Taca, and Avianca Leasing are jointly and severally liable under the notes as co-issuers, Fitch said.

The notes will be senior unsecured obligations of each of the issuers and will rank equally with the other senior unsecured indebtedness of the issuers, the agency said.

The ratings reflects the company's important regional market position as the leader carrier in Colombia and Central America, geographically diversified business model, stable EBITDAR margins, high gross adjusted leverage and adequate liquidity, Fitch said.

The ratings also consider the vulnerability of the company's cash flow generation to higher fuel prices and the inherent risks of the airline industry, balanced by the carrier's ability to maintain margins based on the leader position in the markets where it operates, the agency said.

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