Ratings boost for Qantas

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By admin February 13, 2015 21:05

Ratings boost for Qantas

Standard & Poor’s (S&P) has revised Qantas’ rating outlook to stable from negative and has affirmed the “BB+” long-term issue rating its senior unsecured debt, and a “B” short-term rating on Qantas. S&P affirmed the recovery rating on the debt at “3,” indicating an “expectation of meaningful (50%-70%) recovery for creditors in the event of a payment default.”

S&P credit analyst Graeme Ferguson said: “The outlook revision to stable reflects our view of the meaningful improvement in Qantas’ operating environment, which we expect to translate to improved credit metrics. We therefore believe that the immediate threat to the BB+ corporate credit rating on Qantas has receded. However, we expect underlying demand conditions to remain weak for the Australian airline industry. In our opinion, Qantas remains somewhat vulnerable to sudden changes in its operating environment that are a common and recurring feature of the airline industry.”
S&P said that the airline’s restructuring process still had a long way to go that could result in a lower rating if they fell short of expectations. The rating agency also warned that a weakening of Qantas’ liquidity position would also put downward pressure on the rating.

admin
By admin February 13, 2015 21:05