Research Update: Grupo Aeromexico S.A.B. de C.V. Assigned 'BB-' Issuer Credit Rating And Issue-Level Rating; Outlook Negative

Aerovias de Mexico, S.A. de C.V., a subsidiary of Mexico-based air carrier, Aeromexico S.A.B. de C.V., will issue the proposed senior unsecured bond issuance for up to $400 million. The company will use the proceeds primarily to refinance its short-term debt obligations, growth capex, and other corporate expenses. We expect a recovery in the company's lower operating and financial performance for the past 12 months, benefiting from its leading position in Mexico's international air travel market and its route offering, maintaining EBITDA margins at about 20% and leverage ratios in line with the credit rating. On Jan. 24, 2020, S&P Global Ratings assigned its long-term 'BB-' global scale issuer credit rating on Aeromexico. At the same time, we assigned our

...- Aerovias de Mexico, S.A. de C.V., a subsidiary of Mexico-based air carrier, Aeromexico S.A.B. de C.V., will issue the proposed senior unsecured bond issuance for up to $400 million. The company will use the proceeds primarily to refinance its short-term debt obligations, growth capex, and other corporate expenses. - We expect a recovery in the company's lower operating and financial performance for the past 12 months, benefiting from its leading position in Mexico's international air travel market and its route offering, maintaining EBITDA margins at about 20% and leverage ratios in line with the credit rating. - On Jan. 24, 2020, S&P Global Ratings assigned its long-term '##-' global scale issuer credit rating on Aeromexico. - At the same time, we assigned our '##-' issue-level rating on Aerovias' proposed senior unsecured notes. We also assigned a recovery rating of '4' to the notes, indicating an expected average recovery (30%-50%) in the event of a payment default. - The negative...

Research Update