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WN debt downgrade

castle bravo

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Fitch downgrades Southwest Airlines on debt worry

Fri Nov 21, 2008 11:48am EST

http://ad.doubleclick.net/jump/reut...70x40;articleID=INN2147358920081121;ord=2530? NEW YORK, Nov 21 (Reuters) - Fitch Ratings on Friday downgraded ratings of Southwest Airlines (LUV.N: Quote, Profile, Research, Stock Buzz) on concerns about the company's high leverage after it drew down $400 million from a revolving credit facility.
The agency cut Southwest's senior unsecured debt and issuer default rating by one notch to "BBB-plus," placing them three notches above speculative, or "junk" status.
The move "reflects Fitch's view that continuing uncertainty in the U.S. airline operating environment and near-term credit market concerns have led LUV to raise leverage to a level that is no longer consistent with an "A" category credit profile," the agency said in a statement.
Southwest's decision to draw down on its credit facility has raised balance sheet debt to about $3 billion from $2.1 billion at end 2007.
"It appears unlikely that any significant debt reduction will occur in 2009," said Fitch.
The cost of insuring Southwest debt against possible default rose sharply on Friday. Five-year credit default swaps were last trading at about 396 basis points, or $396,000 annually to insure $10 million of debt for five years, according to Markit Intraday, up about 24 percent from late Thursday. (Reporting by Ciara Linnane; Editing by Leslie Adler)
 

scoreboardII

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things are tough all over.

Moody's downgrades debt ratings of AMR Corp. -- corporate family to Caa1; Outlook NegativeAugust 1, 2008

Fitch Ratings has revised the Rating Outlook for UAL Corp. and its principal operating subsidiary United Airlines, Inc. (United) to Negative from Stable. Debt ratings for both entities have been affirmed as follows:
--Senior unsecured rating for United at 'CCC/RR6'.May 29, 2008


Fitch has Delta's Issuer Default Rating at "B," first-lien senior secured credit at "BB/RR1" and second-lien secured credit at "B/RR4." All are non-investment or junk grade.
Oct 31 2008 2:58PM EDT
 
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